FOREX-Turkish lira crumbles on central bank woes, yen gains

    * Graphic: World FX rates tmsnrt.rs/2RBWI5E
    * Fall in lira raises concerns about other emerging markets
    * Yen gains early on speculation about Japan retail
investors
    * Risk aversion supports dollar against other currencies

    By Stanley White
    TOKYO, March 22 (Reuters) - The Turkish lira slumped toward
a record low versus the dollar after President Tayyip Erdogan
stunned investors over the weekend by replacing the hawkish
central bank governor with a critic of high interest rates.

    The yen rose against the euro and the antipodean currencies
on speculation that Japanese individual investors who have been
buying the lira recently for its high rates will be forced to
cut losses and close out their positions.
    Worries that events in Turkey will cause disruptions in
other financial markets also supported the dollar because of its
status as a safe-harbour currency.
    "Other emerging market countries are not in the same
position as Turkey, but there still could be some contagion,"
said Masafumi Yamamoto, chief currency strategist at Mizuho
Securities in Tokyo.
    "There are concerns that people will start taking profits in
other markets. This looks like a time to re-think your
investment strategy, because the rotation into higher-yielding
emerging market currencies will be put on hold."
    The Turkish lira stood at 8.10 per dollar in
early Asia trade, down 11% from its close on Friday.
    At one point the lira fell by as much as 14.9% to 8.4850,
which is close to a record low of 8.5800.
    Liquidity was thin during early trading, but analysts said
they are braced for bigger moves as more investors enter markets
later in the day.
    The yen edged up against the euro, the Australian
dollar and the New Zealand dollar, boosted
by expectations that Japanese retail investors who lost money on
the lira will unwind other popular cross yen trades.
    The dollar was little changed at 108.89 yen but
edged up against the British pound to $1.3833.
    The euro fell slightly to $1.1885.
    Erdogan fired the central bank governor only two days after
a sharp rate hike that was meant to head off inflation of nearly
16% and support the lira.
    The new central bank governor likely means a reversal of the
hawkish and orthodox steps taken to battle inflation, which
could lead to prolonged market volatility, analysts said.
    "After regaining investor confidence with a series of
aggressive rate hikes, Turkey has snatched defeat from the jaws
of victory," analysts at Brown, Brothers and Harriman wrote in
memo.
    A decline in risk appetite weighed on the Australian dollar
, which fell to $0.7725. The New Zealand dollar
also fell slightly to $0.7153.
    Further declines in the Aussie and the kiwi are likely to be
limited because both currencies will still benefit from rising
commodity prices and an acceleration in global trade, Mizuho's
Yamamoto said.
    
========================================================
    Currency bid prices at 2351 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.1885        $1.1906     -0.17%         -2.72%      +1.1900     +1.1870
 Dollar/Yen                   108.8900       108.8650    +0.01%         +5.41%      +108.9250   +108.8800
 Euro/Yen                     129.42         129.58      -0.12%         +1.97%      +129.6000   +129.0500
 Dollar/Swiss                 0.9299         0.9290      +0.13%         +5.14%      +0.9311     +0.9260
 Sterling/Dollar              1.3833         1.3859      -0.12%         +1.32%      +1.3855     +1.3833
 Dollar/Canadian              1.2521         1.2500      +0.16%         -1.68%      +1.2529     +1.2500
 Aussie/Dollar                0.7725         0.7745      -0.26%         +0.42%      +0.7730     +0.7689
 NZ                           0.7153         0.7168      -0.18%         -0.36%      +0.7157     +0.7136
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 

    
 (Reporting by Stanley White; Editing by Lincoln Feast.)