FOREX-Yen nurses losses, markets wary after finmin intervention remarks

Reuters

* Yen holds at two-month lows vs USD, two-week lows vs EUR

* Markets wary after JPY intervention remark, slower Q3Japanese growth

* Weak euro zone GDP data knocks EUR/USD lower

* Yellen's Senate hearing offers no surprises

By Ian Chua

SYDNEY, Nov 15 (Reuters) - The yen languished at two-monthlows against the dollar early in Asia on Friday, havingweakened broadly after Finance Minister Taro Aso told aparliamentary committee Japan must retain currency interventionas a policy tool.

Even the euro, which was knocked lower against the dollar byworryingly weak euro zone data, held its ground at two-weekhighs versus the yen.

The dollar last traded at 100.06 yen, after climbingas far as 100.15 overnight -- a high not seen since Sept. 11.The euro fetched 134.59 yen, not far off Thursday'speak of 134.70.

For the week, the dollar is up 1.0 percent on the yen, whilethe euro is 1.7 percent higher.

Aso said on Thursday that as with any other country, Japanneeded to ensure it retains currency intervention as a policytool and be ready to take action when markets are excessivelyvolatile.

His comments came after data showed Japan's economy slowedin the third quarter, although not by as much as feared.

"The standout performer was USD/JPY," said Stan Shamu,market strategist at IG in Melbourne.

"A slower reading for Japan's Q3 GDP saw talk of furtherstimulus from the BoJ ramp up along with comments by Financeminister Aso who said FX intervention is a policy option."

Against the greenback, the euro slipped to $1.3456,pulling back from a one-week high of $1.3499.

Investors sold the euro after figures showed the euro areaeconomy all but stagnated in the third quarter, keeping aliveexpectations the European Central Bank should do more tostimulate growth.

That helped the dollar index recover most of itslosses suffered late in New York on Wednesday, when dovishremarks by Federal Reserve Chair nominee Janet Yellen were firstpublished.

Yellen continued that tone at a Senate hearing on hernomination to head the U.S. central bank, robustly defending theFed's bold steps to spur economic growth and calling efforts toboost hiring an "imperative".

"Overall the tone of Yellen's speech was dovish in line withexpectations, and added limited new information for the market,"JPMorgan analysts wrote in a note to clients.

The dollar index last stood at 80.975, having pulled up froma one-week trough of 80.737. The greenback also reboundedagainst commodity currencies, with the Australian dollar slipping to $0.9311 from $0.9388.

There is no major economic data scheduled for release inAsia on Friday. In Europe, the region's finance ministers meetin Brussels for a second day to outline plans to deal with banksstill in difficulty.

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