By Hideyuki Sano

TOKYO, Sept 16 (Reuters) - The yen crept higher on Thursdaybut the market was on the alert for more intervention by Japaneseauthorities after a massive amount of yen-selling the previousday knocked the yen off a 15-year high against the dollar.

Some traders see chances of another round of interventionincreasing if the dollar slips back below 85 yen, after Japansold an estimated 2 trillion yen ($23 billion) on Wednesday, arecord for a single day, in a move seen as aimed at showing itsresolve to curb yen strength.

The market is also watching what U.S. Treasury Secretary TimGeithner might say later in the day about Japan's intervention,which boosted the dollar by more than 3 percent, its biggestdaily gain against the yen in almost two years.

"Intervention will likely continue for a while, perhaps forquite a long time, because once authorities start it, it's notsomething that they can stop easily," said a trader at a majorJapanese bank.

Prime Minister Naoto Kan reiterated on Thursday that Japanwould take decisive steps on yen rises if needed, Jiji newsagency reported.

The dollar fell about 0.5 percent to 85.30 yen as someJapanese exporters took advantage of its jump to sell dollarsearned overseas, pushing it off Wednesday's high of 85.78 yen hiton electronic trading platform EBS.

The dollar sprang up from a 15-year low of 82.87 yen onWednesday after Japanese authorities, concerned that the yen'srise will hurt the economy by squeezing exporters' profits,stepped into the market for the first time in six years.

Traders have said Japanese exporters wanted to sell thedollar above 85 yen before their half-year book-closings at theend of September.

"Looking at the dollar's surge yesterday, some Japaneseexporters may want to wait a bit more before they sell thedollar," said Teppei Ino, an analyst at Bank of Mitsubishi-TokyoUFJ.


Institutional investors may hold back from selling the dollaragainst the yen in anticipation of a further rebound in thedollar, said Kimihiko Tomita, the head of forex at State StreetGlobal Markets.

"According to our data, institutional investors have startedto close their yen-short/dollar-long positions since mid-August,which I think helped to accelerate the yen's rise. Interventioncould make those investors think twice about closing theirpositions," he said.

Speculators who have bought the yen heavily may be forced toclose their positions if the yen continues to fall.

Data from the U.S. Commodity Futures Trading Commissionshowed last week that speculators have a big net yen longposition of 52,183 contracts.

"My hunch is that not all of these positions have beenunwound yet. So there could be more short-squeezing if the dollarrallies," said a trader at a Japanese bank.

Yet the dollar faces many resistance levels on the upside aswell, starting with its 20-day upper Bollinger Band around 85.80.More resistance is seen around 86.30, where the bottom of anIchimoku cloud sits on Thursday.

Some traders are already building up long dollar/yenpositions as they speculate that more yen-selling interventionmay be in the offing, which suggests profit-taking could emergeat any time.

The market will be looking to Geithner's testimony to theSenate Banking Committee at 1400 GMT as Japan's interventioncould have complicated his efforts to persuade China to let theyuan appreciate.

Any criticism by Geithner of Japan's intervention could sparkspeculation that Japan may scale back its activity, dealers said.

On Wednesday, U.S. lawmaker Sander Levin, who chairs the U.S.congressional committee examining China's currency policy,described Japan's intervention as "deeply disturbing".

Geithner will tell lawmakers in prepared testimony thatChina's yuan currency has risen too slowly and he is examiningwhat tools may be needed to persuade Beijing to move faster.

The euro traded at 110.76 yen, now down about 0.7 percent onthe day and off a one-month high of 111.63 yen struck onWednesday.

Elsewhere, the New Zealand dollar slipped half a U.S. cent toaround $0.7260 after the country's central bank signalled thatinterest rates would likely not rise as far or fast as many hadexpected.

The head of the Reserve Bank of New Zealand (RBNZ), AlanBollard, said the kiwi's strength was not justified by thecountry's fundamentals, pushing the kiwi to five-month lowagainst the Australian dollar. (Additional reporting by Masayuki Kitano and Aiko Hayashi;Editing by Michael Watson)