FOREX-Euro near 4-year high against yen, awaits German Ifo


* German Ifo expected to show slightly improved reading

* Seen giving support to euro

* Dollar off four-and-a-half-month highs vs yen

By Laurence Fletcher

LONDON, Nov 22 (Reuters) - The euro hovered near a four-yearhigh against the yen and rose against the dollar as investorspositioned for a robust German business sentiment survey that islikely to show a continued rebound in Europe's largest economy.

The euro was marginally lower at 136.26 yen,having earlier hit 136.54 yen in Asian trading. Against thedollar it was 0.1 percent up at $1.3489.

At 0900 GMT Germany's closely-watched Ifo sentiment ofbusiness sentiment is expected to show that business morale roseslightly this month.

The euro was supported by comments from European CentralBank President Mario Draghi, who played down the possibility ofthe bank implementing negative deposit rates. Reports onnegative rates had pressured the euro on Wednesday, adding tolosses after the minutes from the U.S. Federal Reserve.

"It's going to be pretty important," said Peter Kinsella,currency strategist at Commerzbank, referring to the Ifo survey.

"Given Draghi came out yesterday to pour cold water onimminent negative deposit rates, if you get a good number you'lldefinitely get a move higher in euro/dollar."

But analysts at Morgan Stanley said market expectations ofan improved reading opened "the way for disappointment".

"We view rebounds in euro/dollar as providing renewedselling opportunities. We have introduced a euro/dollar bearishstrategy to our medium-term portfolio," they said in a note.

The dollar, meanwhile, retreated from afour-and-a-half-month high of 101.36 yen against the yen asinvestors took profits after a month-long rally. The dollar was0.1 percent down at 101.03 yen.

Japanese stocks hit six-month highs on Friday, helped bycomments by Bank of Japan Governor Haruhiko Kuroda, who said theeconomy is growing in line with the bank's projections and the 2percent inflation goal will likely be achieved by the fiscalyear to March 2016.

The Nikkei and the yen have been moving in counter-step formonths, with every rally in the share index a signal forspeculators to dump the yen. A lower currency then promises toboost Japanese exports and earnings, further supporting shares.

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