FOREX-Yen extends broad slide, pound bounces

* Yen falls to 3-week lows as long positions trimmed

* Pound/yen at 3-week highs, Aussie/yen at 1-year peak

* Aussie strong at 14-month highs on rate hike fever

By Anirban Nag

SYDNEY, Oct 16 (Reuters) - The yen stayed under broad pressure on Friday as investors cut some of their long positions, while sterling GBP=D4 approached its highest level in three weeks following upbeat central bank comments.

The yen struggled as short covering in the pound spilled over to other cross/yen pairs, easing to 90.85 per dollar JPY= from 90.60 late on Thursday in New York where it lost over 1 percent.

"The yen does look a bit glum now, especially on the crosses," Jonathan Cavenagh, currency strategist at Westpac.

"Offshore investments by Japanese investors are set to pick up, now that the fiscal half-year end is over and I suspect that after some good earnings numbers from the U.S., investors would want to put some money in the U.S."

The euro edged up to 135.65 yen EURJPY=R from 135.28 yen late on Thursday, while the Aussie broke past major resistance to trade at one-year highs of 83.91 yen.

Sterling hit fresh three-week highs of 148.63 yen GBPJPY=R in Asian trade, after having jumped nearly 5 yen in the previous session.

Traders said the yen's decline was triggered by the rebound in the pound after Bank of England policymaker Paul Fisher said he felt more confident the bank's quantitative easing programme was working well (see [ID:nLE413216]).

Investors were also growing more confident about a recovery in the U.S., keeping the yen on the defensive against the U.S. dollar.

The U.S. third-quarter earnings season has got off to a strong start, with Intel (INTC.O), JPMorgan Chase (JPM.N), Google Inc GOOG.N and IBM (IBM.N) profits beating estimates.

Investors were also heartened by signs of stabilisation in the U.S. labour market. The number of workers filing new claims for jobless insurance unexpectedly fell last week to the lowest since January [ID:nN15292883].

The better outlook is starting to feed into a view that U.S. rates could probably rise faster than those in Japan.

On Thursday, former Federal Reserve Chairman Paul Volcker, now an economic adviser to President Barack Obama, said it was important to tighten monetary policy proactively, even if unemployment was high. [ID:nN15324403].

The dollar has fallen about 7 percent against a basket of major currencies =USD so far in 2009, on expectations that U.S. interest rates will remain low and on talk that it is becoming the preferred funding currency, replacing the yen, for leveraged carry trades.

Top White House adviser Lawrence Summers said on Thursday that the Obama administration believed a strong dollar was in the best interest of the United States. [ID:nNAT007130].

Meanwhile, the Australian dollar AUD=D4 traded at fresh 14-month highs at $0.9241, buoyed by mounting speculation of steep interest rate increases by the Reserve Bank of Australia before the year end.

The bank's governor said on Thursday holding rates at very low levels was no longer needed and he would not be timid in raising rates. He also signalled he was keeping a closer eye on prices. (Editing by Jonathan Standing)