SYDNEY (Dow Jones)--The Australian dollar approached its post-float highs Friday, bolstered by widespread market talk of heavy corporate demand, some of it linked to the insurance sector, which faces substantial claims after devastating floods in Queensland at the start of the year. French insurer AXA SA (CS.FR) continued to be mentioned by traders as a buyer as it moves to close its bid to acquire the Asian operations of wealth manager AXA Asia Pacific Holdings SA (AXA.AU) by April 1. The price tag on that cash transaction is A$9.8 billion. Elsewhere, traders speculated an off-market share buyback by BHP Billiton Ltd. (BHP) also bolstered the Australian dollar. The global mining giant will need to buy Australian dollars to pay its domestic shareholders, which still make up a substantial part of its share register. The total size of the buyback is A$5 billion. Talk was also rife that some of the buying might be linked to a potential offshore takeover bid for either energy producer Woodside Petroleum (WPL.AU) or beverages group Foster's (FGL.AU). However, Goldman Sachs said in a late note to markets that neither was likely correct. "Who in their right mind would buy the currency before they have launched a bid given the huge time lag that usually exists between a bid & final completion?" the U.S. investment house said. At 0530 GMT, the Australian dollar was changing hands at US$1.0206, up from US$1.0113 late Thursday. It's post-float high now stands at US$1.0253. Against the yen it traded at Y82.66, up from Y81.02. Insurance flows may also be playing a part in boosting the Australian dollar as overseas firms exposed to the recent floods in Queensland raise holdings of the Australian dollar, they said. Westpac currency strategist Sean Callow said the insurance sector seems to be making a contribution to lifting the New Zealand dollar too as it scrambles to meet claims generated by recent earthquakes, and the same is likely for the Australian dollar. Westpac expects the flow to the New Zealand dollar stemming from the Christchurch earthquake in February to be around NZ$10 billion over the first and second quarters of 2011. "That's more than enough to give the kiwi a lift," Callow said. More fundamentally, risk appetite has returned to markets as concerns swirling around Japan's nuclear emergency have eased, traders said. Still, all the danger has yet to pass. Japan's nuclear power regulator indicated Friday it may raise its assessment of the crisis at the quake-hit Fukushima Daiichi nuclear plant to level six, or "serious accident." Grant Turley, head of currency strategy at ANZ Bank, said that with the Group of Seven nations pledging a week ago to work to stifle the strong yen, risk appetite has returned to the markets generally. Australian interest rates remain among the highest in the world, so some corporates are still parking cash in Australia, albeit temporarily, Turley said --By James Glynn, Dow Jones Newswires; 61-2-8272-4685; james.glynn@dowjones.com

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