* Nikkei jumps 2.5 pct, lends support to dollar/yen
* Euro zone sentiment data helps euro
* Australian dollar near 3-week high, aided by Chinese data
By Anirban Nag
LONDON, Sept 9 The yen fell on Monday, losing
ground after Japanese stocks rallied following Tokyo's winning
bid to host the 2020 Olympics and an upgrade of second-quarter
The euro rose against the dollar to $1.3195, on
better-than-expected euro zone sentiment data.
Its gains were more pronounced against the yen, though. The
Olympics win for Tokyo could translate into a big boost for the
Japanese economy and a shot in the arm for Prime Minister Shinzo
Abe who is attempting to reflate the economy after decades of
below-par growth and deflation.
The Tokyo bid committee reckons hosting the Olympics would
boost the economy by 3 trillion yen ($30 billion) over the next
This boosted the Nikkei, which jumped to a five-week
high and since the yen has an inverse correlation with Tokyo
shares, the currency slipped. The yen is safe-haven currency and
tends to move in the opposite direction to riskier assets like
stocks. Japanese stocks were also helped by a sharp upward
revision of second-quarter growth data.
All of which led some speculators and traders to sell the
yen. The dollar was up 0.4 percent on the day to 99.50
yen having hit a high of 100.11 yen earlier on Monday. The euro
rose 0.5 percent to 131.34 yen.
Both the dollar and the euro have gained more than 14
percent this year against the yen as the Bank of Japan embarked
on a massive monetary stimulus programme in April.
"The Olympics bid has added a bit more to the underlying
negative yen trend," said Paul Robson, currency strategist at
RBS Global Banking.
But the yen's weakness could be temporary with investors
wary about a possible U.S.-led military strike against Syria
that could lead to fresh safe-haven inflows.
FED TAPERING ON TRACK
Against the yen, the dollar recovered to around levels seen
before Friday's weaker-than-forecast U.S. jobs numbers, which
raised some doubts about whether the Federal Reserve will begin
to scale back its stimulus programme next week.
However, comments by two Federal Reserve officials suggested
stimulus unwinding was still on track.
While the euro was supported by the positive Sentix
sentiment data, investors were keeping a wary eye on Rome where
the Italian Senate is set to begin a debate on whether to expel
former premier Silvio Berlusconi from parliament. If carried
out, the move could threaten the country's ruling coalition.
A looming German general election was also keeping the euro
in check. One-month euro/dollar implied volatilities
climbed to 7.75/7.85 percent, from Friday's 7.45 percent,
indicating some nascent nervousness amongst investors.
"Volatility surrounding euro should pick up this week, as we
approach the German elections and Italian politics grab market
attention," Morgan Stanley said in a note. "Higher volatility
and a central bank that stands ready to push back against higher
rates should weaken euro, in our view."
Meanwhile, the Australian dollar hit a three-week high at
around $0.9225, benefiting from Chinese trade data.
China is Australia's biggest export market.
The Aussie last stood at $0.9205, up 0.2 percent. It barely
reacted to Saturday's national election result.