FOREX-Dollar rebounds, yen drops, as traders cling to stimulus hopes

* Dollar recovers, adds 1.9% vs yen, 0.5% vs euro
* Commodity linked currencies rebound but sentiment fragile
* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tommy Wilkes
LONDON, March 10 (Reuters) - The dollar rebounded on Tuesday
afters huge losses against the yen, the euro and the Swiss
franc, as investors turned hopeful that global policymakers
would introduce stimulus to cushion the economic impact of the
coronavirus outbreak.
The moves helped reverse Monday's gyrations, although at 104
yen per dollar the Japanese currency was not back above the 105
seen before this week.
The dollar started to rise as U.S. stock futures rose and
bond yields gained, after U.S. President Donald Trump said he
would hold a news conference on Tuesday about economic measures
in response to the virus.
U.S. Treasury Secretary Steve Mnuchin also said the White
House would meet with bank executives this week in a sign the
U.S. government would roll out measures to cope with the virus.
Analysts said it was too early to call a bottom in the
dollar, which plunged on Monday after a price war between Saudi
Arabia and Russia triggered the biggest daily rout in oil prices
since the 1991 Gulf War.
Against a basket of currencies, the dollar rose 0.2% to
95.613 =USD . It rallied 1.9% against the yen to 104.28
JPY=EBS , considerably higher than Monday's 101.18 low.
The yen also wobbled against major crosses, such as the euro
EURJPY=EBS and the Australian dollar AUDJPY=EBS , after Bank
of Japan officials indicated they were ready to ramp up stimulus
if necessary before a policy meeting next week.
"It seems pretty clear that owning the yen still works when
bond yields are falling, volatility is spiking and risk appetite
is disappearing. So today's a bad day for the yen as we reverse
all those sentiments," said Kit Juckes, an FX strategist at
Societe Generale.
"However, that opens up the opportunity to get yen longs on
before we exit the eye of the storm and feel its fury again."
The euro dropped 0.4% versus the dollar to $1.1385
EUR=EBS .
The dollar rose 1.2% to 0.9361 Swiss franc CHF=EBS on
Tuesday, then fell to 0.9299 francs after three days of heavy
selling pushed it to its lowest in almost five years. Data
suggest the Swiss National Bank is now intervening to weaken its
currency. Against the pound GBP=D3 , the U.S. currency rose 0.5% to
$1.3067.
Commodity-linked currencies that tumbled on Monday following
the crash in oil prices recovered from record lows. The
Norwegian crown added 1.6% versus the euro to 10.796
EURNOK=D3 , still off the 10.4 levels seen last week.
The Canadian dollar rose 0.3% to C$1.3658 CAD=D3 .
The Russian rouble RUB=EBS gained 3.6% and the Mexican
peso MXN=EBS 0.5%.
Volatility surged in FX markets in recent days, but analysts
said it could get much worse depending on upcoming economic
data.
"The data from China is likely to be of particular interest
as it was the first country to be hit by the virus. The tension
on the markets is likely to continue and I would not exclude
that the FX markets might be hit be a proper risk-off wave at
some point soon," said Commerzbank analyst Thu Lan Nguyen.