* Dollar falls vs yen, but still targets 100 yen
* Both dollar and euro on track for weekly gains vs yen
* EU finance minister meeting starts today
By Anirban Nag
LONDON, April 12 (Reuters) - The yen rose on Friday as some investors cut hefty bets against it and booked profits, but it was still on track for its second week of losses against the dollar and euro due to the huge flood of new yen flowing from the Bank of Japan.
The dollar had gained more than 7 percent while the euro jumped over 9 percent since the BOJ pledged last week to inject the equivalent of about $1.4 trillion into the Japanese economy, setting the stage for investors to book profits after such a sharp move in a short time.
But the new policy, begun just over a week ago, effectively involves the BOJ printing about $60 billion dollars worth of yen every month. Traders said that looked set to keep the overall trend for yen weakness remained in place and drive the dollar past 100 yen soon.
"There is a correction taking place in the wider yen selloff that we have seen," said Chris Walker, currency strategist at Barclays. "But drops in the dollar/yen have been shallow and are good levels to short the yen. We forecast dollar/yen to rise to 103 yen in a month's time."
The dollar was on track for its largest two-week gain versus the yen since early 2009 after it hit a 4-year high of 99.95 yen on Thursday on trading platform EBS. But it fell shy of 100 yen and the latest pullback on Friday saw it trade 0.5 percent lower on the day at 99.15 yen.
The euro fell more than one percent on the day to 129.015 , moving away from a near three-year high of 131.1 yen hit on Thursday. It was last trading at 129.50 yen, still down 0.8 percent on the day.
U.S. retail sales number for March are due at 1230 GMT and while forecasts are for an unchanged reading, a weaker number is likely to have only a temporary weakening impact on the dollar, Walker added.
The BOJ's steps have prompted many analysts to revise up their forecasts for the dollar's strength against the yen. Societe Generale analysts now target an eventual rise to 110, up from 103 previously while Bank of Tokyo Mitsubishi UFJ forecasts dollar/yen at 109 yen in the next 12 months.
On Friday BOJ Governor Haruhiko Kuroda said he had taken all necessary steps to meet its 2 percent inflation target in two years and will try to minimise the market volatility in the Japanese government bond (JGB) market caused by its massive bond buying.
Fund managers and analysts say once the volatility in the bond market settles, Japanese investors are likely to reallocate money overseas in search of higher yields.
"With the BoJ now a major buyer of JGBs, expectations are that Japanese investors in JGB's - mainly banks, insurance companies and pension funds - will start to allocate part of their money to foreign assets," said Jaco Rouw, fund manager at ING Investment Management.
"This might partly be on an unhedged basis if the BoJ successfully creates expectations of a weaker yen. As almost all yen weakness so far has been driven by the international financial community, this Japanese flow should be the next leg of further yen depreciation."
The data shows no such flow yet but analysts expect that may change quickly.
Against the dollar, the euro was down 0.4 percent at $1.3050 . Reported option expiries around $1.3000 could likely keep the currency pinned around that level.
Strategists said markets will focus on a meeting of European Union finance ministers starting later on Friday, expected to approve a 10 billion euro bailout package for Cyprus.
Ministers will also likely discuss revisions to the terms and conditions of bailouts for Portugal and Ireland.