* Dollar/yen slips as Japanese companies sell at month-end
* Yen crosses also fall; investment trust flows watched
* Eyes on more U.S. data later in the day
By Satomi Noguchi
TOKYO, Oct 30 (Reuters) - The dollar drifted sideways against
the euro on Friday as investors awaited more U.S. data later in
the day while the yen rose, helped by month-end demand from
Japanese companies.
Analysts said month-end dollar selling for yen had been
weighing on the U.S. currency in Asian trading, while yen crosses
retraced some of their rebound of the previous day as short-term
short-covering faded.
Analysts also said the market was waiting to see if yen
selling would materialise from Japanese investment trusts, with a
new Sumitomo Mitsui Asset Management fund investing in sovereign
and corporate bonds in emerging markets drawing 189.6 billion yen
($2.1 billion) from Japanese retail investors. []
It was the year's biggest first-day launch for a single
series of Japanese mutual bonds, or toushins.
The market watches Japanese mutual fund flows carefully
because of their dampening effect on the yen but as the Brazilian
real drew the highest demand, analysts said outflows may not
materialise until later in the day as real trading in Asian time
was not very liquid.
"Dollar/yen is looking very heavy on top after seeing
Japanese exporters selling the dollar," said a senior trader at
Japanese brokerage firm.
"But bids are also strong with some expectations for
yen-selling flows linked to toushin launches towards the London
fixing, giving little direction at the moment."
The dollar fell 0.5 percent to 90.98 yen <JPY=> and the euro
shed 0.5 percent to 134.90 yen <EURJPY=R>.
"Levels above 90 (on dollar/yen) look attractive for
corporates, especially those who have been revising down their
rates of exchange for this year, they want to sell as high as
possible," said Masafumi Yamamoto, chief FX strategist Japan at
Barclays Capital in Tokyo.
The higher-yielding Australian dollar fell 0.9 percent to
83.01 yen <AUDJPY=R> and the New Zealand dollar <NZDJPY=R>
dropped 1 percent to 66.35 yen. They were also weaker on the day
against the dollar.
Both have been popular buys against the yen this year but
have had a volatile week, hit by profit-taking and then a rebound
on Wednesday and Thursday, when their trading volumes surged to
their highest levels this month on Reuters Matching.
The Bank of Japan began withdrawing some of its special
credit measures from financial markets, ending buying of
commercial paper and corporate bonds in December but then also
extending a key loan scheme. []
Analysts said the changes, which were mostly expected, did
not affect the yen. It also forecast three years of deflation,
effectively pledging to keep interest rates near zero at least
until 2011. []
Investors will closely watch Friday's U.S. data including the
University of Michigan consumer sentiment survey for October and
the Institute of Supply Management Chicago's October index for
manufacturing activity. <ECONUS>
Traders also said the biggest influence on the currency
market would be month-end flows, with some hefty moves in global
stock markets and portfolio rebalancing flows expected.
The dollar traded below the 76 mark against a basket of
currencies <.DXY> <=USD> and not far from a 14-month low of 74.94
struck on on Oct. 21.
The euro <EUR=> was steady on the day at $1.4826 <EUR=> after
jumping over 0.8 percent the previous day.
(Additional reporting by Anirban Nag in Sydney and Charlotte
Cooper in Tokyo; Editing by Michael Watson)
