* Aussie up 0.5% after PM's party books shock election win
* Yen eases on broad recovery in risk appetite
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, May 20 (Reuters) - The Australian dollar got a boost
against the greenback on Monday following a surprise election
victory by the country's conservative government, while the yen
dipped slightly on a recovery in market sentiment.
The dollar index against a basket of six currencies was
largely steady at 97.970 .DXY , having booked its biggest
weekly rise since early March last week.
The Aussie was the big mover early in Asia and was last up
half a percent at $0.6904 AUD=D4 , having bounced from a
four-month trough of $0.6865. It was briefly quoted as high as
$0.6990 but dealers said that was a miss-hit and the true dealt
peak was $0.6938. The currency's upward swing came after Australian Prime
Minister Scott Morrison's centre-right Liberal National
Coalition booked a shock win in federal elections, beating the
centre-left Labor party, who had been tipped to win. "The reaction was relatively large because the result was
unexpected," said Masafumi Yamamoto, chief currency strategist
at Mizuho Securities.
"But election results in the past haven't been a big driver
for the Australian dollar. A change of government doesn't
usually lead to a big change of policy," he said.
The Aussie also found support on a statement from China's
central bank on Sunday that it would maintain the stability of
its yuan within a reasonable and balanced range. Against the yen, the dollar gained 0.1% to 110.195 JPY= ,
building on last week's gains, when it booked its first weekly
gain against the Japanese currency in five weeks.
The yen dipped on a broad improvement of risk appetite among
investors. Data showed the Japanese economy was stronger than
expected in the last quarter.
Japan's economy grew at an annualised rate of 2.1%,
government data showed, accelerating slightly from the previous
quarter's growth backed by net export gains. The preliminary reading for first-quarter gross domestic
product compared with the median estimate of a 0.2% annualised
contraction in a Reuters poll of economists.
The euro was a shade higher at $1.1161 EUR= , recovering
slightly after dropping last week on comments from Italian
Deputy Prime Minister Matteo Salvini that European Union rules
harm his country. Investors' focus this week is on the May 23-26 elections for
the new European Parliament.
Market participants will also eye European readings for a
private purchasing managers' index that measures activity in
services and manufacturing due on Thursday, after Germany last
week returned to growth in the first quarter of
2019. "If we see good PMIs, the euro will form a bottom. It could
be the start of the recovery," said Mizuho's Yamamoto.
(Editing by Sam Holmes)