Wires

FOREX-Dollar surges vs yen as stock markets rally

cutting rates.

* Dollar surges, adds more than 2% vs yen

* ECB did not follow Fed, BoE in cutting rates

* European markets rebound after Thursday's meltdown

* Policymakers struggle with coronavirus response

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds new comment, updates prices) NEW YORK, March 13 (Reuters) - The dollar surged on Friday, posting sharp gains against the safe-haven Japanese yen as stock markets recovered globally and investors cheered efforts policymakers to address the economic fallout from the coronavirus outbreak. The greenback extended gains against several currencies after a blowout in swap spreads on Thursday signaled that investors want dollars. While those spreads came in on Friday, the dollar held strong. The dollar also benefited from a news report that U.S. President Donald Trump will declare a national emergency over the fast-spreading coronavirus on Friday, opening the door to more federal aid to combat the disease. But market participants said signs of dollar funding stress persist and policymakers probably need to do more. "Underlying concerns regarding the economic fallout from the coronavirus on credit markets broadly remain," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto. "It may be tempting to look for signs of a low in global stocks but with the underlying issue - the coronavirus - still unchecked, we think that is premature at this point," he added. He noted that the cost of raising U.S. dollar funds in the cross-currency euro swap market has widened again on Friday after narrowing the day before on the Federal Reserve's announcement to inject more liquidity into the banking system. Wider spreads in the cross currency basis swap market suggested increased signs of U.S. dollar shortage for corporates seeking funding. In afternoon trading, the dollar gained 2.9% against the yen to 107.66. Wells Fargo said it had further upgraded its forecast for the yen against the dollar as the risk of financial turmoil remains, saying that the greenback will fall below 100 yen. "The rate cuts and other policy actions from global central banks have done little to quell market panic. That may be due to the fact that fiscal policymakers have generally been slow to act," said Wells Fargo in a research note. The dollar also rallied versus another safe haven, the Swiss franc, rising 1.1% to 0.9543 franc . Against a basket of currencies, the dollar rose 1.2% to 98.362. The euro nursed losses despite European Central Bank policymakers' efforts to reassure markets. European assets sold off on Thursday after investors were underwhelmed by the bank's stimulus measures. The euro was last down 0.9% at $1.1091. The ECB on Thursday announced a stimulus package that provides loans to banks with rates as low as -0.75% and increases bond purchases, but it did not join its counterparts in the United States and Britain The pound also plunged 2% against the dollar to $1.2302. The greenback's rebound this week reflects its role as the world's most liquid currency, which investors seek in times of stress. The Fed meets next week and many analysts now expect the central bank to chop its own target policy rate, quite possibly to zero, and give markets new guidance about how it plans to combat the economic fallout from the coronavirus.

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Currency bid prices at 2:53PM (1853 GMT)

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

Session

Euro/Dollar EUR= $1.1071 $1.1183 -1.00% -1.24%+1.1221 +1.1055Dollar/Yen JPY= 108.0600 104.6300 +3.28% -0.73%+108.1400 +104.5100Euro/Yen EURJPY= 119.64 117.01 +2.25% -1.89%+119.8400 +116.9000Dollar/Swiss CHF= 0.9546 0.9437 +1.16% -1.36%+0.9560 +0.9423Sterling/Dollar GBP= 1.2306 1.2571 -2.11% -7.19%+1.2624 +1.2278Dollar/Canadian CAD= 1.3922 1.3926 -0.03% +7.20%+1.3994 +1.3782Australian/Doll AUD= 0.6147 0.6234 -1.40% -12.45%+0.6326 +0.6123

ar

Euro/Swiss EURCHF= 1.0568 1.0555 +0.12% -2.62%+1.0618 +1.0551Euro/Sterling EURGBP= 0.8995 0.8894 +1.14% +6.41%+0.9019 +0.8845NZ NZD= 0.6040 0.6086 -0.76% -10.33%+0.6160 +0.6018

Dollar/Dollar

Dollar/Norway NOK= 10.1174 10.1613 -0.43% +15.33%+10.2363 +9.8832Euro/Norway EURNOK= 11.2110 11.3478 -1.21% +13.97%+11.4520 +11.0055Dollar/Sweden SEK= 9.7323 9.7346 -0.63% +4.11%+9.8247 +9.6258Euro/Sweden EURSEK= 10.7732 10.8414 -0.63% +2.90%+10.9411 +10.7710

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Richard Chang)