FOREX-Yen slips broadly as short-covering rally fizzles
* Dollar/yen, cross/yen regain some ground after sell-off
* Yen pressured as short-covering and profit-taking fade
* Dlr/yen support at 200-day MA near Y83.50, then Y83.30
* Euro supported by China's pledge to buy Spanish bonds
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, April 13 (Reuters) - The yen slipped on Wednesday as a bout of risk reduction eased, with some market players looking for fresh opportunities to put on bets against the yen after having booked profits the previous day.
The yen fell against the dollar and dipped broadly on the crosses, giving back some of the gains it made on Tuesday, when it rallied broadly as short-covering of the Japanese currency gained steam.
Traders said a sell-off in global equities and commodities coupled with an upgrade of Japan's nuclear crisis had prompted investors to unwind some of the recent one-way yen-funded carry trades. But some market players said it had more to do with extended positioning more than anything else.
"I think the markets at the moment are just pausing to take a bit of profit and assess things in the yen crosses," said David Forrester, FX strategist at Barclays Capital in Singapore.
"We have to remember that over the past two weeks we have had a big rush into yen-funded carry trades," Forrester said.
The Australian dollar edged up 0.5 percent against the yen 87.67 yen . It regaining some ground after Tuesday's 1.8 percent slide, but still remained well below a 2-1/2 year high just above 90 yen touched on Monday.
A bout of risk reduction and position unwinding seen on Tuesday across various markets seemed to lose momentum on Wednesday, with equities showing signs of stabilising after a sell-off.
MSCI's broad measure of Asia-Pacific shares outside Japan dipped 0.2 percent , a mild drop compared to its 1.6 percent fall on Tuesday.
DOLLAR SUPPORT NEAR Y83.50
The dollar rose 0.5 percent to 83.98 yen after having slid more than 1.2 percent on Tuesday for its biggest one-day percentage drop in four months.
The dollar bounced off support at its 200-day moving average near 83.50 yen. More support lies at 83.34 yen, the 23.6 percent retracement of the dollar's mid-March to April rally, and 83.30 yen, the dollar's March 11 intraday high.
Short-term resistance lies at 84.33 yen, the conversion line on the daily Ichimoku chart, a form of Japanese technical analysis widely used among market players.
Among the bets against the yen that were closed out the previous day were punts taken using FX options, said a customer dealer for major Japanese bank, adding that some market players on Tuesday sold dollar call options with strike prices of 86 yen and 88 yen to book profits.
"After they booked profits yesterday, positions held by market players who had taken bets against the yen earlier are now pretty square," the customer dealer said. "They are now looking for the proper timing and catalyst to build yen-selling positions again."
The euro last stood near 121.51 yen , up 0.4 percent from late U.S. trade on Tuesday but well below an 11-month high of 123.33 yen hit on Monday. Immediate support is seen around 120, the overnight low, then the 119.20/60 area.
"At this stage, we don't see reason to believe that the early week price action marks the start of a broader 'risk-off' move ... This latest dip is an opportunity to reset or extend longs (against the yen)," analysts at BNP Paribas wrote in a client note.
The euro held steady against the dollar at $1.4474 , having touched a 15-month high of $1.4520 on Tuesday on trading platform EBS.
The euro gained a lift against the dollar on Tuesday after Chinese Premier Wen Jiabao said China will carry on buying Spanish sovereign bonds. [ID:nLDE73B12S]
The U.S. dollar index, which tracks the dollar's performance against a basket of major currencies, edged up 0.1 percent to 74.925 , but was still not far from a 16-month low of 74.704 struck this week. (Editing by Kevin Plumberg)