* China output and retail sales a bit above expectations
* But new Chinese local-currency loans fall, imports down
* Dollar index pares losses after hitting 15-mth low
By Masayuki Kitano
TOKYO, Nov 11 (Reuters) - The yen tested higher ground on
Wednesday, buoyed by stop-loss buying and eking out gains against
the high-yielding Australian dollar after a mixed batch of
Chinese economic data.
The yen fell initially after the figures showed Chinese
industrial output and retail sales rose a bit more than expected
in October from year earlier, but then gained on more numbers
showing a dip in the pace of investment and loan growth and lower
than forecast exports and imports. []
The move also triggered stop-loss sell orders on dollar/yen
around 89.50 yen <JPY=>, briefly sending the greenback down as
far as 89.29 yen, its lowest level in more than a week.
"The numbers are a bit mixed," said Masafumi Yamamoto, chief
FX strategist for Japan at Barclays Capital.
Loans are a focal point, since they have been seen as a
driver of China's domestic demand-led economic recovery, and a
factor behind fund flows into China's stock market, Yamamoto
said.
The dollar also dipped broadly after the data and hit a fresh
15-month low of 74.889 <.DXY> against a basket of currencies
before edging back up to 75.057 later and recovering to stand
almost unchanged on the day at 89.72 yen.
The Australian dollar initially rose as high as $0.9325
<AUD=D4>, nearing its October peak of $0.9330, which was the
highest since August 2008. But it later edged down to $0.9287.
Yen crosses also fell after investors took profits in their
recent gains, dealers said.
Against the yen, the euro fell 0.2 percent to 134.37 yen,
dipping as far as 133.80 yen on Japanese exporters' selling and
after it hit some stops, dealers said.
The Aussie fell 0.2 percent to 83.34 yen, paring losses after
a drop to 83.03 yen in the wake of the Chinese data. <AUDJPY=R>
The market is awaiting Australian unemployment data on Thursday
for clues on economic strength and further rate hikes. <ECONAU>
Market players said even though the dollar had edged back
later in the day, it remained broadly out of favour as investors
expect U.S. interest rates to remain near zero into 2010 as the
economy recovers from a harsh recession.
Several Federal Reserve officials seemed to back that view on
Tuesday, striking a cautious note on the U.S. economic outlook.
[].
"The dollar index is entering a new world, and the question
is whether there will be more dollar selling from here," said
Akira Hoshino, chief manager for Bank of Tokyo-Mitsubishi UFJ's
foreign exchange trading department.
"Since U.S. monetary policy is the fundamental basis for
dollar-selling, until people get the sense that they are really
going to do it (raise interest rates), it will be hard to buy the
dollar," Hoshino said.
The euro was steady at $1.4982 <EUR=>. Option barriers are
lurking around $1.5025 levels while buyers are lined up at
$1.4950.
Meanwhile, sterling <GBP=D4> was trading around $1.6747,
having tumbled to as low as $1.6600 on Tuesday after Fitch
ratings agency told Reuters that Britain was the economy most at
risk of losing its top AAA credit rating.
(Additional reporting by Anirban Nag in Sydney and Kaori Kaneko
in Tokyo; Editing by Michael Watson)
