* Dollar falls against yen amid risk aversion
* U.S. corporate earnings worries sap risk appetite
* Fed minutes give few details on asset purchases
(Adds details; updates prices)
By Vivianne Rodrigues
NEW YORK, April 8 (Reuters) - The dollar fell against the
yen on Wednesday as concerns about U.S. corporate earnings and
a volatile Wall Street kept risk appetite low and boosted the
safe-haven appeal of the Japanese currency.
U.S. stocks seesawed as investors weighed news of possible
government aid for some life insurers against the prospect of
more poor corporate earnings. Alcoa <AA.N> on Tuesday kicked
off the earnings season with a second consecutive quarterly
loss.
The greenback lost more ground against the yen after
minutes of the Federal Reserve's last rate-setting meeting
showed policy-makers agreed to the need for asset purchases to
halt the economic slide. For details see [].
Still, analysts said with liquidity thinning before the
Easter holiday weekend, currencies are largely being driven by
risk sentiment and equity markets.
"It seems the (foreign exchange) market overall is lacking
direction and just reacting to short-term moves in equities,"
said Vassili Serebriakov, currency strategist at Wells Fargo in
New York.
Currencies have closely tracked equity prices for direction
in recent months, with falling stocks boosting demand for the
dollar and yen, which are often seen as safer places to park
money in times of heightened risk aversion.
The Japanese currency continued its rebound after hitting a
six-month low of 101.45 yen against the dollar earlier in the
week. In late afternoon trading in New York, the dollar was
down 0.8 percent at 99.69 yen <JPY=>. The euro also fell
against the Japanese currency to trade 0.9 percent lower at
132.01 yen <EURJPY=>.
Fed policy-makers agreed at their March 17-18 meeting that
"substantial additional purchases" of a range of longer-term
assets was appropriate to deal with a steep drop in economic
activity, minutes of the meeting showed.
The minutes failed to provide further details on such
purchases but they also showed participants expressed concern
about downside risks to the economy.
"There was surprisingly little mention about quantitative
easing. If anything, I think the dollar could firm on the
downgrades to both growth and inflation and the resulting rise
in risk aversion in the market," said Omer Esiner, a market
analyst at Ruesch International in Washington, D.C.
"I would expect the dollar to weaken against the Japanese
yen as a result," he added. The minutes' focus on weak growth
and inflation "signals an extended period of economic
malaise."
BOE MEETING
The euro <EUR=> was last up 0.1 percent at $1.3246,
recouping earlier losses as Wall Street stocks recovered. The
euro zone single currency climbed to near $1.36 this week after
the Group of 20 summit of world leaders in London gave a boost
to risk appetite.
Earlier, the euro came under pressure after Ireland
announced its second emergency budget in six months on Tuesday,
which traders said highlighted strains in the euro zone.
[]
Later in the session, Fitch Ratings stripped Ireland of its
top AAA credit rating. []
"Ireland remains the most pressing problem for the (euro
zone) region as the country's economy has taken a swan dive,"
Boris Schlossberg, director of currency research at GFT Forex
in New York, wrote in a research note.
"Euro bears argue that ultimately the euro zone will have
no choice but to rescue the Celtic Tiger or risk the threat of
dissolution," he said.
Markets now are also awaiting a policy decision by the Bank
of England on Thursday, at which the central bank is expected
to leave UK interest rates on hold at 0.5 percent. []
The pound <GBP=> was last 0.3 percent lower at 1.4690 to
the dollar.
(Additional reporting by Wanfeng Zhou; Editing by James
Dalgleish)
