Rupee snaps four-day fall on corporate dollar sales

By Suvashree Choudhury and Dipika Lalwani

MUMBAI (Reuters) - The rupee rebounded sharply on Tuesday after four consecutive sessions of losses as a weakening dollar prompted exporters to sell the U.S. currency, while a spurt in buying of domestic debt by foreign investors also helped.

The yen gained sharply against both the dollar and the euro as investors sought the traditional safety of the Japanese currency amid end-of-year nerves over economic risks ahead.

Sentiment was also buoyed after foreign institutional investors net bought government bonds for about 8.36 billion rupees ($131.6 million) on Monday, according to the National Securities Depository Ltd website.

"Some corporate dollar-selling and a rise in major Asian currencies, led by the Japanese yen, are aiding the rupee," said Hari Chandramgethen, chief forex dealer at South Indian Bank Ltd.

The partially convertible rupee ended at 63.39/3950 to a dollar after moving in a wide band of 63.3550 to 63.79.

The 10-year benchmark bond yield ended down 6 basis points at 7.87 percent.

($1 = 63.5300 Indian rupees)

(Editing by Subhranshu Sahu and Prateek Chatterjee)