* Yen hits 4-month high vs euro on risk-off sentiment
* Dollar/yen hits week's low
* Aussie, Kiwi slip on RBA views on labour and inflation
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, April 4 Risk averse investors drove the
yen to its highest level against the euro since mid-November on
Tuesday, while the Australian dollar sank to a three-week low.
Appetite for risk has been curtailed by market nerves ahead
of a meeting between U.S. President Donald Trump and Chinese
President Xi Jinping and following Monday's suspected suicide
bombing in St. Petersburg, Russia.
The yen rose by as much as 0.7 percent to 117.48 against the
euro in London, its highest level since November 22.
Against the dollar, it was up 0.4 percent to 110.465 yen, after
hitting 110.335 in its highest in a week in Asia.
"It is the old explanation. Risk-off in the ... equity
markets is pushing dollar/yen lower more than anything," Niels
Christensen, FX strategist with Nordea in Copenhagen, said.
Japan's main Nikkei stock index, which tends to move
inversely to the yen, closed 0.9 percent lower at a 10-week low.
"Investors are a little bit cautious ahead of the earnings
season that kicks off late next week in the U.S." Christensen
Monday's largely positive U.S. construction spending and
manufacturing data affirmed a steady improvement in the economy,
but did little to uphold Treasury yields and the dollar, which
was last up 0.2 percent against a basket of rivals.
"There was a tragedy in Russia and there may be some
hedging-type buying ahead of the French presidential debate and
also French elections in three weeks," said Yujiro Goto,
currency analyst with Nomura in London, on the yen's surge.
The euro fell 0.3 percent to a three-week low of $1.0636
as traders reached their desks in New York, its advance
tempered by a sharp decline in German bond yields following the
bombing in St. Petersburg.
The Reserve Bank of Australia's decision to keep its cash
rate at a record low of 1.5 percent on Tuesday came as little
surprise. But the Australian dollar fell after the central bank
hinted it was not too confident about domestic labour and
The Aussie lost nearly 0.8 percent to reach a three-week low
of $0.7545, having declined steadily over the past two
weeks from a four-month high of $0.7750. The currency was also
over 1 percent lower against the yen.
The New Zealand dollar also sank to a three-week low, moving
in tandem with the Aussie and down 0.6 percent on the day at
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Tokyo Markets Team; Editing by Tom
Heneghan and Alexander Smith)