* Graphic: World FX rates https://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. yen rose against the euro and the antipodean currencies on speculation that Japanese investors who have been buying the lira recently for its high rates will 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 TRYTOM=D3 stood at 8.0500 per dollar, down 10% 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.
Analysts said they are braced for bigger moves as more investors enter markets later in the day.
The yen edged up against the euro EURJPY= , the Australian dollar AUDJPY= and the New Zealand dollar NZDJPY= , boosted by expectations that Japanese retail investors who lost money on the lira will unwind other popular cross yen trades.
The dollar eased slightly to 108.82 yen JPY=D3 but steadied against the British pound GBP=D3 at $1.3851.
The euro EUR=D3 fell slightly to $1.1892.
Erdogan fired the central bank governor only two days after a sharp rate increase that was meant to head off inflation of nearly 16% and support the lira. new central bank governor will most likely lead to 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.
The onshore yuan CNY=CFXS held steady at 6.5085 against the greenback after China kept its benchmark lending rate for corporate and household loans unchanged for an 11th straight month. decline in risk appetite weighed on the Australian dollar AUD=D3 , which fell to $0.7724. The New Zealand dollar NZD=D3 also fell slightly to $0.7155.
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 0512 GMT Description
U.S. Close Pct Change
+108.9500 +108.7050 Euro/Yen
+129.6000 +129.0500 Dollar/Swiss
+0.9260 Sterling/Dollar GBP=D3
+1.3819 Dollar/Canadian CAD=D3
All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates
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