CORRECTED - CORRECTED-FOREX-Dollar takes breather vs yen after sell-off
(Corrects 3rd paragraph to first monthly net outflow from U.S. capital markets in nearly two years instead of first net selling of U.S. securities by foreign investors in nearly two years.)
TOKYO, Feb 16 (Reuters) - The dollar pulled away from a one-month low against the yen on Friday, getting some respite after tumbling the previous session on surprisingly robust Japanese growth data and some soft U.S. indicators.
The yen had rallied across the board on Thursday after data showed Japan's economy grew at an annualised pace of 4.8 percent in the October-December quarter, bolstering expectations for a Bank of Japan rate rise next week.
The dollar extended its losses after data showed the first monthly net outflow from U.S. capital markets in nearly two years in December, and ended up logging its biggest daily fall against the yen in around 10 months.
But the yen's gains lost some steam this session because of foreign-currency buying by Japanese importers, helping the dollar pull away from a one-month low of 119.17 yen hit on electronic trading platform EBS on Thursday.
"There seems to be some commercial buying (of foreign currencies), including buying of crosses against the yen," said a trader for a Japanese trust bank, adding that there was some talk of commercial demand for sterling.
The dollar stood at 119.33 yen JPY= as of 0256 GMT, up slightly from around 119.25 yen in late U.S. trading on Thursday.
Sterling stood at 233.02 yen GBPJPY=R, up from 232.73 yen in late U.S. trading.
The euro was slightly lower at $1.3138 EUR=, having pulled back from a six-week high of $1.3173 hit on EBS on Thursday after the U.S. capital flows data.
Data showing a surprise decline in U.S. industrial output last month, a spike in U.S. jobless claims last week and a sharp slide in U.S. mid-Atlantic region manufacturing activity also kept the dollar under pressure on Thursday.
GDP BOLSTERS YEN
The yen seemed to be on solid footing in wake of the fourth-quarter growth data, traders said.
"I think there will be some yen buying based on the fact that economic fundamentals at the moment look pretty good," said Hidenori Kato, head of forex sales and trading at Societe Generale in Tokyo.
The dollar's upside is likely to be heavy in the near term, he said.
"The commercial buying has been pretty persistent and it wouldn't be surprising to see the dollar head back to around 119.70/75 yen today, but anything beyond that will be a thorny path and won't come easy," Kato said.
A Reuters poll on Thursday found market players evenly split on whether the BOJ will raise rates next week, with 24 of 49 traders and analysts in Tokyo's currency and bond markets expecting a move.
Five respondents see the BOJ waiting until its March meeting to raise rates. [BOJ/INT]
Any lift the yen gets from a rate rise may prove fleeting, however.
Even if the BOJ bumps up rates to a decade-high 0.5 percent from 0.25 percent, many market players believe the Japanese currency would still be hobbled by its very low yield compared with other major currencies.
(Additional reporting by Satomi Noguchi)
