* Aussie, kiwi erase gains as yen rebounds
* Sterling firm on rising BoE rate hike expectations
* Bitcoin slips from record high, ether firmer
TOKYO, Oct 21 (Reuters) - Commodity currencies slipped from
multimonth highs on Thursday after their rally on strong raw
material prices was sideswiped by sudden selling against the
yen, in what many traders described as inevitable profit-taking
after a long rally.
Traders saw no clear trigger for the move, though some
traders mentioned unsubstantiated speculation that cash-strapped
China Evergrande could make an announcement soon as it
battles with possibility of default.
The Chinese property giant abandoned plans to sell a $2.6
billion stake in one of its key units on Wednesday.
The Australian dollar turned 0.2% lower against the dollar
at $0.7501 after reaching a 3 1/2-month high of
$0.75465 earlier in the day.
Against the yen, the Aussie dropped 0.5% to 85.58 yen
after hitting a near four-year high of 86.25.
The New Zealand dollar, which had risen for the past 10
consecutive days against the Japanese currency in its longest
rising streak since 2014, also dropped 0.3% to 82.04 yen
The U.S. dollar slipped 0.2% versus the yen to 114.12 yen
, veering off its four-year peak of 114.695 hit on
"I expect a bit of correction in risk assets ahead of a lot
of events coming up in the next week, such as the Bank of
Japan's (BOJ) policy meeting," said Masaru Ishibashi, joint
general manager of Sumitomo Mitsui Bank.
"Ahead of Japan's election (on Oct. 30), there are a lot of
talks that a cheaper yen is hurting the economy. BOJ Governor
Haruhiko Kuroda will be surely asked about it."
The BOJ will hold its policy meeting on Oct. 27-28.
European currencies were firmer, with the euro trading flat
at $1.1664, staying close to Tuesday's three-week peak of
Sterling dipped 0.1% to $1.3807 but was supported
on firming perceptions the Bank of England (BoE) will raise
interest rates as soon as next month to curb inflation, despite
softer-than-expected UK price data on Wednesday.
Against the euro, sterling was near its highest levels since
February 2020, at 84.33 pence per euro.
"It's as if the BoE is stealing the spotlight from the Fed as
it looks likely to raise rates before the Fed," said Kyosuke
Suzuki, president of Financial algotech company at Ryobi
"What could be the game changer, though, is if the Fed is
also jumping on the bandwagon of global rate hikes much sooner
than expected," he added.
The dollar's index was little changed at 93.612,
holding barely above Tuesday's three-week low of 93.501.
It has declined 1.1% from a 15-month peak hit last week.
Expectations that the Fed could soon scale back pandemic-era
stimulus has underpinned the dollar over the past few months.
The Federal Reserve is widely expected to announce tapering
of its bond purchase at a policy meeting in early November, but
it is expected to distance itself from future rate hikes for
Money markets are pricing in one U.S. rate hike in 2022,
after the Fed is expected to have finished its tapering process
in the middle of next year.
In cryptocurrencies, bitcoin slipped 1.3% to $65,145
, after having hit a record high of $67,016 the
Ether climbed 0.5% to $4,183, edging near its record
peak of $4,380 hit in May.
(Reporting by Hideyuki Sano; Editing by Sam Holmes, Ana
Nicolaci da Costa and Gerry Doyle)