FOREX-Yen, dollar lose ground on better risk appetite
* Better risk appetite keeps yen, U.S. dollar subdued
* Trading light, Japan closed for holidays
* ECB, U.S. jobs, banks' stress test results eyed
SYDNEY, May 4 (Reuters) - The yen and the U.S. dollar extended last week's losses on Monday as better economic data worldwide saw investors grow increasingly confident that the worst in the global economy may be past, boosting risk appetite.
Trading is expected to be thin and volatile in Asia, with Japan shut until Thursday for Golden Week holidays.
High-yielding currencies like the Australian AUD=D4 and New Zealand dollars NZD=D4 were in sight of recent highs, as a rally in stock markets saw investors cut back on safe-haven assets to take positions in commodities and related currencies.
"Global investor confidence appears to have gained some positive momentum," said Greg Gibbs, fx strategist at the Royal Bank of Scotland.
"Credit default swap, emerging market credit and implied volatility indices have fallen to their lowest levels since October. This resilency in investor confidence suggests the Aussie and the kiwi will rally further in the week or so."
Reports on Friday showed U.S. consumers felt more upbeat about the economy in April while a key guage of manufacturing suggested the sector was gradually emerging out of a deep slowdown.
Recent data from Asian powerhouses also seem to support the global economy is showing some signs of recovery. Chinese manufacturing gained momentum last month while South Korean exports fell by less than expected.
The U.S. dollar gained to 99.42 yen JPY= from 99.29 yen late in New York on Friday, although the it lost ground elsewhere .DXY.
The Aussie rose to $0.7332, from $0.7308 late on Friday and in sight of a recent 7-month high of $0.7384 struck last week. The New Zealand dollar advanced to $0.5730 from around $0.5697.
The euro EUR= edged up to $1.3290 EUR= from $1.3264 on Friday with gains likely to be curtailed ahead of a European Central Bank (ECB) meeting on Thursday.
Some believe policy-makers might follow the U.S. Federal Reserve's lead and deploy unconventional emergency measures like direct asset purchases, to stimulate growth.
"This week the ECB is poised to cut rates 25 basis points to 1 percent, where it will stay for some time," said Sue Trinh, senior currency strategist at RBC Capital.
Investors will also await the finding of the U.S. banks' stress tests this week while the U.S. employment picture will become clearer on Friday. Analysts expect another 630,00 jobs were lost last month, modestly less than recent readings. (Reporting by Anirban Nag, editing by Wayne Cole)
