* Euro rises, traders await clarity on Spanish bailout
* Euro zone industrial production data due 0900 GMT
* Yen capped after U.S. jobs data, Softbank news
By Jan Harvey
LONDON, Oct 12 The euro rose on Friday but
remained well within the week's range as traders awaited clarity
on when and whether heavily indebted Spain would request a
bailout to shore up its finances.
Buying by sovereign investors lifted the single currency in
early trade, but it looked likely to struggle for traction until
answers emerged over a potential Spanish aid request, which
would likely trigger European Central Bank bond buying.
The Spanish economy minister said on Friday there was no
political resistance to a bailout request from within the euro
The euro was at $1.2974, up 0.4 percent on the day
but down 0.4 percent week-on-week as concerns over corporate
earnings hurt stock markets and currencies seen as higher risk,
and as worries over Spain curbed fresh buying.
"There would be buyers for the euro and sellers for the
dollar if Spain got its bailout, but while that may have seemed
almost inevitable a few weeks ago, now it looks as though that
could be delayed," Rabobank currency strategist Jane Foley said.
"If there is some sort of resolution politically to bring
that forward, that could break (the euro) out (of its range),
but it's very difficult to know how that resolution can be
achieved when Spain politically is not in a position where it
can ask for that bailout."
The euro hit a 10-day low at $1.2825 on Thursday, but found
good support at its 200-day moving average at $1.28249.
It recovered after the International Monetary Fund said
Europe's heavily-indebted countries should be given more time to
YEN EASES VS DOLLAR
Buying by Asian central banks at lower levels also lent
support to the single currency, dealers said, although stocks
fell on Friday, which could buoy interest in currencies seen as
lower risk, like the dollar, at the euro's expense.
Markets were awaiting euro zone industrial production data
due at 0900 GMT, expected to dip 0.4 percent on the month.
"If the data disappoints to the downside, the euro is likely
to ease," Commerzbank said in a note.
Against the yen, the euro rose 0.6 percent to 101.39 yen
. The dollar hit a high of 78.54 yen,
recovering from Thursday's 10-day low against the Japanese
currency of 77.94 yen.
Data showing a drop in initial U.S. jobless claims last
week to a 4-1/2 year low and news that Japanese wireless service
provider Softbank Corp may buy a majority stake in
Sprint Nextel, in a deal potentially worth at least 1
trillion yen ($12.74 billion), helped lift the dollar against
the yen, traders said.
"The mood towards the yen switched completely overnight,
after the initial claims and Softbank news, which at least is
not a yen-buying factor," said Hiroshi Maeba, head of FX trading
Japan for UBS in Tokyo.
He said the potential Softbank deal was so large that
currency markets could be tapped for part of the financing.
The Australian dollar rose 0.2 percent to
US$1.0290, nearly matching the previous session's one-week high