By Hideyuki Sano

TOKYO (Reuters) – The Australian dollar jumped and the safe-haven yen eased slightly on Wednesday after struggling Chinese property giant Evergrande said it would make an upcoming bond coupon, allaying immediate fears about a messy corporate collapse.

Some of the excitement fizzled, however, after traders realised it was still not known whether the developer would be able to pay the coupon on its offshore dollar bonds due on Thursday.

The Australian dollar rose as much as 0.49% to $0.7268 before giving up part of the gains to trade at $0.7247, up 0.2% on the day. The yen weakened about 0.2% to 109.485 to the dollar, showing little reaction to the Bank of Japan’s decision to keep its policy on hold.

Investors are still nervous about the fate of Evergrande, which missed interest payments due Monday to at least two of its largest bank creditors, Bloomberg reported.

“The market reacted to the coupon payment news but it kind of looks like it is just out of the frying pan into the fire,” said Teppei Ino, senior strategist at MUFG Bank.

The dollar index stood at 93.226 in early Asian trade, staying not far off Monday’s one-month high of 93.455.

The euro hardly budged at $1.1725, having stabilised at a one-month low of $1.1700 on Monday.

Earlier, the common currency dropped to a seven-month low of 127.93 yen, as the safe-haven Japanese currency was supported by the cautious mood.

The Chinese yuan was fairly stable, firming slightly to 6.4748 per dollar in the offshore trade, edging back from one-month low of 6.4878 set on Monday.

The onshore yuan traded at similar levels, down slightly from its Friday’s close before a long weekend, at 6.4715.

FED LIFTOFF

Another major focus for the day is the U.S. Federal Reserve, which is expected to drop more hints on its future policy path, including when to start tapering its bond buying and when to start raising interest rates.

There are rising expectations the central bank will signal plans to start reducing its massive bond purchases in November if incoming data holds up.

The so-called “dot plot”, which charts policymakers economic and rates projections, could offer clues on when the Fed will hike interest rates from the current near zero level.

“Perhaps tapering is already baked in. What will matter the most for the currency market is how dot-plots or comments from Powell will affect U.S. rate expectations,” said JP Morgan’s Sasaki.

Elsewhere, the Canadian dollar stood little changed, having pared gains made on Tuesday after Prime Minister Justin Trudeau’s Liberals won a tightly-contested election.

Cryptocurrencies bounced back a tad after plunges in the previous session.

Bitcoin rose 3.8% to $42,134 after having hit a 1-1/2-month low of $39,573. Ether gained 3.7% to $2,868, having fallen to as low as $2,732, down more than 30% from a four-month peak hit earlier this month.

The United States on Tuesday unveiled sanctions against a cryptocurrency exchange over its alleged role in enabling illegal payments from ransomware attacks.

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Currency bid prices at 0256 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

$1.1725 $1.1726 +0.00% -4.03% +1.1730 +1.1717

Dollar/Yen

109.4200 109.1900 +0.16% +5.89% +109.4800 +109.1200

Euro/Yen

128.29 128.06 +0.18% +1.08% +128.4000 +127.9400

Dollar/Swiss

0.9240 0.9236 +0.04% +4.43% +0.9245 +0.9238

Sterling/Dollar

1.3659 1.3661 -0.02% -0.03% +1.3678 +1.3653

Dollar/Canadian

1.2794 1.2812 -0.13% +0.48% +1.2826 +1.2775

Aussie/Dollar

0.7250 0.7233 +0.24% -5.75% +0.7268 +0.7225

NZ

Dollar/Dollar 0.7017 0.7005 +0.20% -2.26% +0.7031 +0.6994

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

(Reporting by Hideyuki Sano; Editing by Sam Holmes)