FOREX NEWS - Yen earns respite after hitting 5-mth low vs euro

* Yen recovers after hitting lows vs euro, commoditycurrencies * Yen still seen as the funding currency for carry trades * Dollar steady after rally, NY Fed Dudley's speech eyed By Anirban Nag LONDON, March 19 (Reuters) - The yen climbed off afive-month low against the euro on Monday, and picked up versusgrowth-linked currencies, earning a brief respite from investorsseeking to fund purchases in riskier assets by borrowing in theJapanese currency. The yen's status as the currency of choice for carry trades,where investors borrow a low-yielding currency to buyhigher-yielding assets, is likely to continue after the Bank ofJapan's surprise easing last month. Additionally, a recent surge in U.S. Treasury yields hasmade the dollar less appealing as a funding currency compared tothe yen. After hitting fresh lows against the euro andhovering near 11-month troughs against the dollar, theJapanese currency has bounced, but is likely to stay underpressure with most investors looking at any rebound to initiatefresh bearish positions in the yen, analysts said. The euro rose as high as 110.15 yen at one point on tradingplatform EBS, its highest level since late October. It laterpared those gains and was last changing hands at 109.30 yen, down 0.6 percent on the day. The higher-yielding Australian dollar rose to 88.63 yen, its highest level since May 2011. The growth-linkedAustralian dollar last stood at 87.95 yen, down 0.4 percent onthe day. "There has been a significant rise in short yen positions sowe are seeing a bit of a pullback ahead of a holiday in Japan,"said Jeremy Stretch, head of currency strategy at CIBC WorldMarkets. Japanese markets will be shut for a holiday on Tuesday. "These are opportunities to initiate fresh bearish positionsand we expect dollar/yen to rise towards 85-85.50 yen while theeuro having hit a high above 110 yen, is likely to consolidate." Net shorts in the yen have risen significantly over the pastthree weeks. With Greek-related risks in the euro zone taking abreather, the euro was supported against the yen, while theFederal Reserve's not so dovish outlook was giving U.S dollarbulls a boost. That view could be challenged at a speech by New York FedPresident William Dudley later in the day. Dudley is an archdove and could reiterate the Fed's position that unless the U.S.jobless rate drops further, the chance of further stimulus couldnot be ruled out. But given a sharp drop in recent days, the Japanese currencymay be due for some respite, traders said. Also, March istypically a month that attracts Japanese corporate demand foryen ahead of Japan's business year-end at the end of the month. DOLLAR CONSOLIDATES The dollar was little changed against a basket of currenciesat 79.856 while the euro was slightly loweragainst the greenback, trading at $1.3150. Despite some easing in euro zone tension, speculators arestill running bearish positions in the euro, although they havetrimmed some of those bets. The dollar last stood at 83.12 yen, down 0.3 percent on theday and retreating from an 11-month high of 84.187 yen hit onThursday. Ray Farris, chief strategist for Asia fixed income forCredit Suisse in Singapore said whether the dollar rises furtheragainst the yen in coming months will depend on the Bank ofJapan's monetary policy to a large extent. "If the BOJ continues to, month after month, push with newmonetary easing measures and does enough to convince thedomestic market in Japan that it is serious and credible intrying to raise the inflation rate to about 1 percent, thendollar/yen can probably continue to rise," Farris said. "But it's still unclear just how aggressive the BOJ iswilling to be," he said.