* Equities rally amid return in global risk appetite lifts
dollar
* Loonie, kiwi in focus ahead of Canadian, NZ c.bank
meetings
* Markets focus on how dovish the c.banks may sound
By Shinichi Saoshiro
TOKYO, Sept 9 (Reuters) - The dollar gained against the
safe-haven yen on Wednesday, boosted by a surge in European and
U.S. stocks amid a global recovery in risk appetite that also
drove rallies in commodity currencies such as the Australian and
Canadian dollars.
The dollar was up 0.2 percent at 120.09 yen JPY= ,
extending gains from an overnight low of 118.885, with a spike
in U.S. debt yields on reduced risk aversion helping the
greenback.
The Australian dollar edged up to $0.7036 AUD=D4 , adding
to the 1.4 percent surge overnight which whisked it away from a
6-1/2-year low of $0.6892 struck on Monday.
"Equity movements continue to impact the dollar and yen, but
they won't be taking centre stage today. Instead, the Canadian
and New Zealand dollars, which are likely to move more ahead of
their central bank policy decisions, will gather much of the
attention," said Masafumi Yamamoto, senior strategist at Monex
in Tokyo.
The Bank of Canada is widely expected to keep interest rates
unchanged at 0.5 percent in light of recently upbeat data after
already cutting twice this year, although market participants
are readying for possibly dovish undertones from the central
bank. The decision is due at 1400 GMT.
The Reserve Bank of New Zealand (RBNZ), on the other hand,
is expected to cut interest rates to 2.75 percent on Thursday.
The focus is now on the language accompanying the policy
decision.
"The forecasts and language will probably imply one further
OCR (official cash rate) cut. Westpac remains on the dovish side
of consensus in terms of how low the OCR is eventually cut,"
wrote Sean Callow, a senior currency strategist at Westpac in
Sydney.
The Canadian dollar was steady at C$1.3197 against the
greenback CAD=D4 after gaining 0.8 percent overnight as crude
oil, a major export for Canada, surged on the back of a global
equities rally. A tumble in crude oil prices had sent the loonie
to an 11-year low of $1.3353 last month.
The New Zealand dollar was up 0.6 percent at $0.6380
NZD=D4 , after gaining more than 1 percent overnight. The kiwi
had slid to 6-year low of $0.6200 late in August.
The euro was little changed at $1.1193 EUR= , stuck in a
narrow $1.1230-$1.1122 range this week.