FOREX-Dollar climbs on surprise jump in retail sales

(Updates prices, adds comments, adds detail)

By Steven C. Johnson

NEW YORK, Feb 13 (Reuters) - The dollar rose to a one-month high against the yen on Wednesday after government data showed an unexpected rise in U.S. retail sales last month, dampening views that the U.S. economy is contracting.

The small gain in January retail sales bucked expectations for a drop in monthly U.S. cash register receipts, but analysts said the outlook for both the economy and the dollar remained uncertain.

"The data is clearly a surprise to the upside. It is somewhat reassuring to a market that had been concerned with a slowdown in consumer spending, which of course raises the risk of recession," said Omer Esiner, market analyst at Ruesch International in Washington.

"On balance, the report is dollar-positive, although I don't think it changes the outlook for further (Federal Reserve interest) rate cuts," he said. "But in the near term, it does ease some recession concerns."

The dollar jumped against the yen after the data, rising to a one-month high of 108.37 yen <JPY=> before easing to 108.15 yen, up 0.8 percent from late Tuesday.

Dealers, though, reported substantial selling interest above 108 yen, suggesting the greenback may have difficulty holding above that level for long.

Even at current levels, the dollar remains in the middle of a downward trend that began in June, 2007, when it rose above 123 yen. To break out of that, it would have to rise above 112 yen. With the Federal Reserve still seen reducing benchmark interest rates, analysts say that's unlikely any time soon.