Safe-haven yen lower in Asian trade

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The yen fell against the dollar and euro in early Asian trade on Wednesday as risk sentiment shifted on easing worries over Europe's debt crisis, following a successful Spanish bond auction.

The dollar firmed to 81.25 yen in Tokyo trade from 80.87 yen in New York late Tuesday. The euro also rose to 106.62 yen from 106.16 yen while buying $1.3123 against $1.3127 in New York.

Share-price gains in the United States and Asia boosted investors' risk-taking appetite, prompting a sell-off in the safe-haven yen, dealers said.

There were also rising expectations that the central Bank of Japan will usher in new easing measures at its April 27 meeting, Mitsubishi UFJ Trust and Banking chief manager of currency trading Takao Yahata told Dow Jones Newswires.

Tokyo's benchmark Nikkei 225 index was 1.59 per cent higher in late morning trade following overnight rises in US and European markets.

On Tuesday, the International Monetary Fund raised its 2012 global economic growth outlook to 3.5 percent, reigniting hopes for an improving world economy.

"Financial markets have leaned to risk-on sentiment again," Credit Suisse said, noting a smooth Spanish bond auction, improved German economic data, solid US corporate earnings and a rate cut by India's central bank.

Hopes for additional monetary easing by central banks around the world was the main driver of bullish sentiment, it said in a research note.

However, Credit Suisse warned it was unlikely that the US Federal Reserve and European Central Bank would move on additional easing in the immediate future.

"If macro-economic data started showing deterioration, the market mood will again turn risk-off," the report said.

Spain on Tuesday raised a higher-than-targeted 3.18 billion euros ($4.2 billion) in 12- and 18-month bonds, albeit with high borrowing costs. The sale eased concerns that Madrid would be unable to finance its massive public debt and be forced to seek a bailout.

Sentiment was also boosted Tuesday by data showing that German investor confidence rose, unexpectedly, for the fifth month in a row.

The ZEW think-tank's economic expectations index edged up by 1.1 point in April to stand at 23.4 points.