* Investors await auction of 30-yr Treasury bonds
* NZ dollar jumps after RBNZ holds rate at 2.5%
* Aussie climbs on data showing smaller job losses in May
By Kaori Kaneko
TOKYO, June 11 (Reuters) - The dollar fell against a basket
of currencies on Thursday, paring some gains made after the
benchmark U.S. Treasury yield hit its highest point in eight
months the previous day.
The New Zealand dollar jumped after the Reserve Bank of New
Zealand left interest rates on hold while the Australian dollar
also climbed after news that employment fell by far less than
expected in May.
Higher oil prices and the Nikkei share average <>
breaking above 10,000 to hit an eight-month high also helped
boost risk appetite and the shift to commodity-linked currencies,
dealers said. [] []
But trade overall was subdued in Asia as investors wait to
see if an auction of 30-year Treasury bonds later in the day will
add to rising U.S. long-term yields after the results of
Wednesday's sales of 10-year Treasury notes heightened concerns
over the balloning U.S. budget deficit, dealers said.
U.S. interest rate moves have been one of the major themes
for the currency market since talk of the Federal Reserve
possibly hiking rates by the end of the year emerged in the wake
of jobs data last week.
"The yield rise, which is triggering the dollar's rebound, is
based on an improved U.S. economic outlook, halting the
greenback's broad slide seen when the euro rose above $1.43,"
said a senior trader at a Japanse bank.
"But there's some focus on bond supply worries behind the
yield rise, which in turn could be dollar negative, complicating
the interpretation of the currency moves," the trader said.
U.S. Treasury prices fell on Wednesday, sending the benchmark
10-year yield up to 4.0 percent for the first time in eight
months after an auction of 10-year notes. []
The dollar index, a gauge of the greenback's performance
against six other major currencies, fell 0.5 percent to 79.903
<.DXY> from late U.S. trade on Wednesday.
The euro rose 0.4 percent to $1.4043 <EUR=>, resuming its
rise towards a more than five-month high of $1.4339 touched last
week before falling sharply near $1.38 earlier this week.
The euro was up 0.1 percent higher at 137.37 yen <EURJPY=R>.
The dollar slipped 0.3 percent to 97.82 yen <JPY=>.
"The market doesn't seem to have a fixed view on how to take
the talk of Fed interest rate hikes as well as the recent spike
in Treasury yields," said Yousuke Hosokawa, treasury department
senior manager at Chuo Mitsui Trust and Banking.
"It looks like the market is taking factors such as yield
moves and stocks as an excuse to change positions," he said.
China has no choice but to keep buying U.S. Treasuries, Dai
Xianglong, the chairman of China's National Social Security Fund
(NSSF), said in remarks reported on Thursday. []
Dai's comments came after Russia's central bank said on
Wednesday it will diversify its currency reserves by cutting U.S.
Treasury purchases and buying IMF-backed bonds, which drove the
dollar lower the previous day.
The New Zealand dollar rose after the Reserve Bank of New
Zealand (RBNZ) kept its key interest rate steady at a record low
2.5 percent, the first pause in nearly a year, but left the door
open to resume its aggressive easing cycle to combat recession.
[] []
The kiwi climbed as high as $0.6377 <NZD=D4> after the
decision, up about 1 percent on the day. The currency rose 0.8
percent to 62.30 yen <NZDJPY=R>.
The Australian dollar climbed 1.1 percent to $0.8103 <AUD=D4>
and 0.8 percent to 79.30 yen <AUDJPY=R> after Australia's jobless
report for May showed only 1,700 job losses, which was much
smaller than the market forecast of 30,000 job losses, reducing
views for any more cuts in interest rates.[]
The market took in its stride Japan's revised gross domestic
product for the first quarter, which showed the economy shrank
3.8 percent from the previous quarter, less than economists'
forecast for a 4.0 percent contraction. []
(Additional reporting by Satomi Noguchi; Editing by Michael
Watson)
