FOREX-Yen ticks down in choppy market, sentiment still fragile

* Yen retains Monday's gains, euro almost flat
* Risk-sensitive Aussie under pressure, sterling at 5-month
low
* Coronavirus fears keep markets on edge

By Hideyuki Sano
TOKYO, March 17 (Reuters) - The safe-haven Japanese yen
ticked down and some risk currencies won a brief reprieve on
signs of more economic support from policymakers, though choppy
conditions on Tuesday underlined fragile confidence in markets
frazzled by days of turbulence.
Market liquidity was light and investors remained nervous
after coordinated moves by central banks had spectacularly
failed to quell trepidation over the coronavirus pandemic.
The dollar rose 0.5% to 106.32 yen JPY= , having risen as
much as 1.3% to 107.185 as U.S. stock futures ESc1 bounced
back 3% after a 10% fall of more than 10% the previous day.
Still, the dollar was down 1.6% so far this week
The euro stood flat at $1.1180 EUR= , after wild gyrations
on Monday.
Helping the dollar against the safe-haven yen were signs
governments are stepping up fiscal support measures.
New Zealand said it would pump NZ$12.1 billion ($7.31
billion), or 4% of gross domestic product, into the economy to
slow a contraction expected from business disruptions caused by
the coronavirus outbreak. In the United States, Boeing Co BA.N confirmed it is in
talks with senior White House officials and congressional
leaders about short-term assistance for itself and the entire
aviation sector. The New Zealand dollar NZD=D4 rose as much as 0.8% before
giving up most of its gains to stand at $0.6048, off a 11-year
low below $0.60 touched on Monday.
Still, market sentiment remained fragile after global risk
assets were routed over the past several days on worries the
outbreak and draconian containment measures could trigger steep
recessions in major economies.
As a result, trading in most markets including foreign
exchange is being driven more by loss-reduction and other
position unwinding to reduce risks or make up for losses, rather
than fresh bids, market players said.
"Liquidity is even worse compared with yesterday. Even the
gold has been sold sharply. This is a world I have never seen
before. This crisis is more incomprehensive than previous crises
like the tech bubble burst (in 2000) and the LTCM crisis (in
1998)," said Kazushige Kaida head of forex at State Street Bank
in Tokyo.
The Australian dollar, seen as sensitive to global growth
due to the country's link to commodities, dipped 0.1% to $0.6113
AUD=D4 , after having hit an 11-year low of $0.60765 on Monday.
The Canadian dollar, which has strong correlation with oil
prices, sank to a four-year low of C$1.4020 per U.S dollar
CAD=D4 , as oil prices plummeted on a Saudi-instigated price
war, before erasing the losses.
U.S. benchmark oil futures CLc1 fell $3.03 to settle at
$28.70 a barrel, near a 4-year low.
The British pound is also under pressure, dogged by worries
about not only Britain's exit from the European Union but also
its sizable current account deficit.
Sterling traded at $1.2250 GBP=D4 , down 0.2% and near a
five-month low of $1.2203 hit in the previous session.
Investors are also shunning many emerging market currencies.
MSCI emerging market currency index .MIEM00000CUS dropped
0.2%, staying at its lowest level since late 2018.
A rout on Wall Street on Monday stemming from fears over the
coronavirus crisis in the West trumped the Federal Reserve's
emergency move to slash rates on Sunday. Investors took the Fed action, joined by central banks in
Japan, Australia, New Zealand and elsewhere, as insufficient
given the pathogen's breakneck spread across the world which has
put many nations on virtual lockdowns.
Some analysts said the hasty moves may have backfired as
investors were spooked over the possible panic among
policymakers.
"Central banks are pressing the gas pedal to the floor. But
the car is bogged down in a quagmire that is called coronavirus,
so it won't move forward," said Ayako Sera, market strategist at
Sumitomo Mitsui Trust Bank.
"Until the outbreak stops, for investors, it is time for
patience," she said.
There is no clarity on that front, with global cases now
rising to 174,100 with 6,700 deaths, prompting countries to shut
borders and take increasingly drastic measures to try to reduce
the severity of the outbreak.