* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
* Fall in lira raises concerns about other emerging markets
* Yen gains early on speculation about Japan retail
investors
* Risk aversion supports dollar against other currencies
By Stanley White
TOKYO, March 22 (Reuters) - The Turkish lira slumped toward
a record low versus the dollar after President Tayyip Erdogan
stunned investors over the weekend by replacing the hawkish
central bank governor with a critic of high interest rates.
The yen rose against the euro and the antipodean currencies
on speculation that Japanese individual investors who have been
buying the lira recently for its high rates will be forced to
cut losses and close out their positions.
Worries that events in Turkey will cause disruptions in
other financial markets also supported the dollar because of its
status as a safe-harbour currency.
"Other emerging market countries are not in the same
position as Turkey, but there still could be some contagion,"
said Masafumi Yamamoto, chief currency strategist at Mizuho
Securities in Tokyo.
"There are concerns that people will start taking profits in
other markets. This looks like a time to re-think your
investment strategy, because the rotation into higher-yielding
emerging market currencies will be put on hold."
The Turkish lira TRYTOM=D3 stood at 8.10 per dollar in
early Asia trade, down 11% from its close on Friday.
At one point the lira fell by as much as 14.9% to 8.4850,
which is close to a record low of 8.5800.
Liquidity was thin during early trading, but analysts said
they are braced for bigger moves as more investors enter markets
later in the day.
The yen edged up against the euro EURJPY= , the Australian
dollar AUDJPY= and the New Zealand dollar NZDJPY= , boosted
by expectations that Japanese retail investors who lost money on
the lira will unwind other popular cross yen trades.
The dollar was little changed at 108.89 yen JPY=D3 but
edged up against the British pound GBP=D3 to $1.3833.
The euro EUR=D3 fell slightly to $1.1885.
Erdogan fired the central bank governor only two days after
a sharp rate hike that was meant to head off inflation of nearly
16% and support the lira. The new central bank governor likely means a reversal of the
hawkish and orthodox steps taken to battle inflation, which
could lead to prolonged market volatility, analysts said.
"After regaining investor confidence with a series of
aggressive rate hikes, Turkey has snatched defeat from the jaws
of victory," analysts at Brown, Brothers and Harriman wrote in
memo.
A decline in risk appetite weighed on the Australian dollar
AUD=D3 , which fell to $0.7725. The New Zealand dollar NZD=D3
also fell slightly to $0.7153.
Further declines in the Aussie and the kiwi are likely to be
limited because both currencies will still benefit from rising
commodity prices and an acceleration in global trade, Mizuho's
Yamamoto said.
========================================================
Currency bid prices at 2351 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1885 $1.1906 -0.17% -2.72% +1.1900 +1.1870
Dollar/Yen JPY=D3 108.8900 108.8650 +0.01% +5.41% +108.9250 +108.8800
Euro/Yen EURJPY= 129.42 129.58 -0.12% +1.97% +129.6000 +129.0500
Dollar/Swiss CHF=EBS 0.9299 0.9290 +0.13% +5.14% +0.9311 +0.9260
Sterling/Dollar GBP=D3 1.3833 1.3859 -0.12% +1.32% +1.3855 +1.3833
Dollar/Canadian CAD=D3 1.2521 1.2500 +0.16% -1.68% +1.2529 +1.2500
Aussie/Dollar AUD=D3 0.7725 0.7745 -0.26% +0.42% +0.7730 +0.7689
NZ NZD=D3 0.7153 0.7168 -0.18% -0.36% +0.7157 +0.7136
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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