* Traders expect dovish Yellen comments
* Dollar up against yen on Japan fin. minister comments
* Dollar pares losses on upbeat U.S. manufacturing data
(Updates with fresh quotes, prices; changes byline, dateline
from previous LONDON)
By Sam Forgione
NEW YORK, April 16 The dollar edged lower
against the euro for the first time in four trading sessions on
Wednesday ahead of Federal Reserve Chair Janet Yellen's
comments, but rose against the yen on signs of future buying of
Tokyo stocks by Japan's state pension fund.
Traders expect Yellen to strike a more dovish tone in
afternoon comments before the Economic Club of New York. Minutes
from the latest Fed policy meeting released last week were
viewed as dovish, as were comments Yellen made on March 31 that
the central bank's "extraordinary" commitment to boosting the
economy would be needed for some time.
"Generally, the expectation is that (Yellen's) tone will be
dovish," said Camilla Sutton, chief currency strategist at
Scotiabank in Toronto. Traders view the Fed's accommodative
stance of keeping interest rates low as negative for the dollar.
The dollar rose against the yen after Japan's Finance
Minister, Taro Aso, promised that "moves" by the $1.26-trillion
government pension fund would become apparent from June, which
helped boost the Nikkei stock index 3 percent.
"Policymakers are very concerned and very interested in
making sure the Nikkei goes back up," said Boris Schlossberg,
managing director of foreign exchange strategy at BK Asset
Management in New York.
The inverse relationship between the Nikkei share index and
the yen is well established. Foreign players traditionally sell
the yen to hedge the currency risk in buying Japanese shares
while a stronger Nikkei typically makes Japanese investors more
comfortable with investing abroad, also negative for the yen.
The dollar pared some losses against major currencies,
however, after data showed U.S. manufacturing output rose for a
second straight month in March. Overall industrial production
was up 0.7 percent, beating analysts' expectations, according to
data from the Federal Reserve.
"It's another data point to confirm that the U.S. economy is
doing relatively well and maintaining the growth expectations,"
said Schlossberg of BK Asset Management.
The euro was last up 0.05 percent against the dollar
at $1.3821. The U.S. dollar index was last down 0.04
percent. The dollar was up 0.33 percent, meanwhile, against the
Japanese yen at 102.25.
(Additional reporting by Patrick Graham in London; Editing by