FOREX-Dollar gains vs yen, buoyed by rally in stocks

* Dollar extends stocks-led gains vs yen, euro

* Many major financial centres shut for Easter weekend

TOKYO, April 10 (Reuters) - The dollar rose against the yen on Friday, buoyed by a rally in U.S. stocks following positive earnings guidance from U.S. bank Wells Fargo (WFC.N), although trade was likely to be thin with many major centres shut for holidays.

Wall Street indexes rose between 3 and 4 percent on Thursday after Wells Fargo said it expected to report a record quarterly profit in an encouraging sign for the troubled banking sector, which has been at the heart of the global financial crisis.[.N]

The greenback hit its highest in six months against the Japanese currency early in the week but then faced a bout of profit-taking on its gains ahead of the long weekend and the onset of quarterly earnings, which tipped it off the peak.

"There's been position-squaring ahead of the Easter holidays and that has been capping dollar/yen and the yen crosses," said Masafumi Yamamoto, head of FX strategy Japan at Royal Bank of Scotland.

"Today the market tried to follow equities."

The dollar rose 0.2 percent to 100.61 yen after climbing 0.8 percent on Thursday. It peaked at 101.45 yen earlier in the week.

The euro eased 0.1 percent to 131.94 yen and lost 0.4 percent to $1.3112.

European Central Bank President Jean-Claude Trichet said the central bank still had some leeway to cut its main interest rate from its record low of 1.25 percent. [ID:nL9724592].

He repeated it would lay out plans for possible unconventional monetary policy measures at its next meeting on May 7 but did not give any details.

The market has been watching for signs the ECB will take unconventional steps to improve credit availability after similar moves by the Federal Reserve and other major central banks.

Fed policy makers warned the U.S. economy would skid more deeply into recession in the coming months but warned it was time to start planning how to wind down spending to avert an inflationary surge. [ID:nN09302273].

The number of U.S. workers filing new claims for unemployment benefit fell last week but was still at levels indicating contraction in the labour market has yet to hit bottom. [ID:nN09264963]. (Reporting by Charlotte Cooper; Editing by Michael Watson)

Forex Quotes

Symbol	Bid	Ask	Time
Nasdaq 100	1334.73	1334.77	18:08
S&P 500 Indx	847.25	847.75	18:08
USD / JPY	100.36	100.39	18:06
Crude Oil	51.86	51.90	18:08
Gold (Spot)	882.83	883.08	18:08
GBP / USD	1.4641	1.4644	18:08
EUR / USD	1.3177	1.3179	18:08

UPDATE 1-Somali pirates vow revenge over comrades' killings

By Abdiqani Hassan

BOSASSO, Somalia, April 12 (Reuters) - Somali pirates threatened revenge on Sunday after two separate hostage-rescue raids by foreign forces killed at least five comrades, raising fears of future bloodshed on the high seas.

The latest raid by U.S. forces on Sunday that saved an American hostage and one by France last week have upped the stakes in shipping lanes off the anarchic Horn of Africa nation where buccaneers have defied foreign naval patrols.

'The French and the Americans will regret starting this killing. We do not kill, but take only ransom. We shall do something to anyone we see as French or American from now,' Hussein, a pirate, told Reuters by satellite phone.

'We cannot know how or whether our friends on the lifeboat died, but this will not stop us from hijacking,' he said.

Sea gangs generally treat their captives well, hoping to fetch top dollar in ransoms.

The worst violence has been an occasional beating.

'We shall revenge,' said another pirate, Aden, in Eyl village, a pirate lair on Somalia's eastern coast.

Some fear the U.S. and French operations may make the modern-day pirates more like their more fearsome forbearers.

'The pirates will know from now that anything can happen. The French are doing this, the Americans are doing it. Things will be more violent from now on,' said Andrew Mwangura of the Kenya-based East African Seafarers Assistance Programme.

'This is a big wake-up to the pirates. It raises the stakes.'

PIRACY ESCALATION

Piracy is lucrative business in Somalia, where gangs have earned millions of dollars in ransoms, splashing it on wives, houses, cars and fancy goods.

After a wane in business early this year, pirates have struck back. They presently hold more than a dozen vessels with about 260 hostages, of whom about 100 are Filipino.

Eyl, Haradheere and other pirate havens along the Indian Ocean coastline have come back to life with the windfall of successful operations.

Somalia's anarchy -- whose 18 years of civil war have given sea gangs assault rifles, grenade launchers and little central control -- has long been ignored by world powers.

The saga over the capture of cargo ship captain Richard Phillips has thrown international attention on the long-running piracy phenomenon that has hiked up insurance costs on strategic waterways where warships now patrol.

'Killing three out of thousands of pirates will only escalate piracy,' said Sheikh Abdullahi Sheikh Abu Yusuf, spokesman of the moderate Islamist group Ahlu Sunna Waljamaca.

(Additional reporting by Andrew Cawthorne in Nairobi and Abdi Sheikh and Abdi Guled in Mogadishu; Writing by Jack Kimball; Editing by Andrew Cawthorne and Jon Boyle) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/) Keywords: SOMALIA PIRACY/PIRATES

(nairobi.newsroom@reuters.com; +254 20 222 4717)

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