* Investors rediscover risk appetite
* Yen eases back vs dollar
* European stocks still on for 4th weekly loss
By Jamie McGeever
LONDON, April 8 (Reuters) - Stocks and bond yields rebounded
on Friday but were still firmly on track to end lower over the
course of a bruising and volatile week marked by the Japanese
yen's surge against the dollar.
Europe's FTSEurofirst 300 .FTEU3 was up 0.7 percent in
early trading, lifted by energy shares thanks to a sharp rise in
crude oil prices, but will likely notch up its fourth straight
weekly decline.
That would be its longest losing streak since October 2014.
The dollar was also 0.7 percent higher against the yen at
109.00 yen JPY= , recovering from its first break below 108.00
since October 2014 the previous day.
"It's been a volatile week, so we're seeing a bit of respite
today," said Ipek Ozkardeskaya, market strategist at London
Capital Group.
"And oil is up by more than 2 percent, which is also a key
reason for the upside in equity indices this morning."
Britain's FTSE 100 .FTSE was up 0.6 percent, Germany's DAX
.GDAXI rose 0.7 percent, and France's CAC 40 .FCHI was up
0.6 percent.
The STOXX Europe Basic Resources .SXPP and the Oil and Gas
.SXEP indexes were both up around 2 percent, the top two
sectoral gainers, tracking the rise in crude prices.
The FTSEurofirst, DAX and CAC are still down on the week,
however, although Britain's FTSE is on course to eke out a
modest gain.
Earlier in Asia MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS ended flat on the day, closing out
the week down 1.2 percent.
Japan's Nikkei .N225 erased earlier losses after Finance
Minister Taro Aso said the government would take steps to
counter "one-sided" moves in the yen in either direction.
The yen's JPY= strength is regarded as negative for
Japan's big exporting firms, and after earlier falling to
near-two-month lows, the Nikkei ended the session up 0.5
percent, leaving it with losses of 2.1 percent for the week.
U.S. futures pointed to a rise of around 0.6 percent at the
open on Wall Street ESc1 . The S&P 500 .SPX fell 1.2 percent
on Thursday, its biggest loss since Feb. 23, and is on course
for its biggest weekly decline in two months.
FED CLARITY?
Much of the volatility this week has been fuelled by the
yen's surge against the dollar, which caught many market
participants off-guard and fuelled speculation Tokyo could
intervene in the currency market to halt the rally.
The dollar rebounded 0.7 percent against the yen on Friday
to 109.00, leaving it set for a weekly fall of 2.3 percent. On
Thursday it fell as low as 107.67 yen.
Sharp appreciation of the yen against the dollar is often a
warning sign of broader financial market stress and investor
risk aversion, which has been exacerbated this week by growing
uncertainty surrounding the U.S. economic and policy outlook.
Federal Reserve Chair Janet Yellen, in a conversation with
former Fed chairmen on Thursday, said the U.S. economy is on a
solid course and still on track to warrant further interest rate
hikes.
But many forecasts, including the closely-followed Atlanta
Fed GDPNow tracker, have slashed first quarter GDP estimates to
just 0.4 percent, and U.S. interest rate futures still see a
less than 20 percent chance of a rate hike in June 0#FF: .
Next up is New York Fed president Bill Dudley, a dovish and
influential policymaker, who speaks later on Friday.
"A combination of falling U.S. real rates and elevated
market volatility are weighing on the dollar versus the euro and
yen," BNP Paribas (PA:BNPP) currency strategists wrote in a note to
clients on Friday.
"New York Fed President Dudley speaks today and could
provide another counterweight to the various Fed presidents
advocating resumption in rate hikes in recent weeks."
The euro EUR= was trading at $1.1380, unchanged on the day
and flat on the week, having hit a six-month high of $1.1454 on
Thursday.
The 10-year U.S. Treasuries yield US10YT=RR was last up 3
basis points at 1.72 percent, having fallen to a six-week low of
1.685 percent on Thursday. It has fallen 25 basis points in the
last four weeks.
In commodities markets, copper CMCU3 last traded at $4,672
a tonne, having suffered its biggest fall in more than six
months on Thursday, when it slumped 2.8 percent to a six-week
low of $4,631 a tonne.
Oil prices rose on Friday after firm economic indicators
from the U.S. and Germany implied support for fuel demand, but
analysts warned another downturn could be on the way due to
ongoing oversupply.
Global benchmark Brent crude futures LCOc1 climbed 3
percent to $40.63 per barrel, and was set for an increase of 5
percent on the week. U.S. crude CLc1 advanced 3.4 percent to
$38.55, also on track for a 5 percent weekly gain.
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Shanghai CSI 300 and global effects interactive https://t.co/YqIYLIbInP
Chinese A-shares vs developed and emerging stocks http://link.reuters.com/rac25w
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