FX: FOREX-Yen, dollar gain as weak US data hits risk appetite
* Yen, dollar gain as weak U.S. data stokes risk-aversion
* Optimism about U.S. monetary, fiscal measures fades
* Trichet remarks dent euro
(Updates prices, adds U.S. data, adds comment)
By Steven C. Johnson
NEW YORK, Jan 29 (Reuters) - The yen and dollar rose on Thursday as more bleak U.S. economic data and falling share prices kept investors wary of risk even as countries embraced further monetary and fiscal stimulus to boost economic growth.
The failing health of the U.S. economy took center stage after data showed the unemployment rolls hitting a record peak and orders for big-ticket items such as appliances and computers falling for a fifth straight month in December.
A separate report revealed sales of new U.S. homes plunged 14.2 percent last month to a record low, further dulling the appeal of higher-risk currencies and assets such as stocks and boosting safe-haven flows into the dollar and yen.
"These are weak numbers, showing the recession continues to drag and is even intensifying," said Andrew Bekoff, chief investment officer at LPB Capital LLC, a Doylestown, Pennsylvania-based wealth management firm.
Midmorning, the dollar was down 0.7 percent at 89.73 yen while the euro fell 1.2 percent to 117.28 yen. The euro was also 0.5 percent weaker at $1.3068 after trading as high as $1.3179 in earlier trade. Sterling pared earlier gains and was last up 0.3 percent at $1.4265.
Analysts said comments from European Central Bank President Jean-Claude Trichet also dented the common currency. The ECB chief told CNN that the central bank could cut euro-zone rates below 2 percent and adopt unconventional measures to boost the economy.
The Federal Reserve kept U.S. interest rates near zero this week and said it was ready to buy long-dated U.S. Treasuries but only if it would help credit conditions improve. It provided no new details about the timing of such a move.
Some said the Fed's proactive approach was helping the dollar.
"The plans are in place by the Fed to lower rates and provide liquidity, which have the market looking a little more forward," said Brian Taylor, head currency trader at M&T Bank in Buffalo, New York. "What the U.S. is doing is far ahead of other countries right now."
