* Traders: yen slide this week too big to extend
* Yen rises vs dlr after Japan investor repatriates funds
* Kiwi retreats from near 5-mth high vs yen
By Satomi Noguchi
TOKYO, March 27 (Reuters) - The yen rose against other major currencies on Friday, recovering from a five-month low versus the New Zealand dollar, as investors concluded that the yen's broad slide this week was too big to extend for the time being.
The repatriation of funds by a major Japanese investor ahead of the end of the business year on March 31 prompted the yen to rise against the dollar.
That in turn prompted some investors to take profits from recent strong gainers against the yen such as the Australian dollar after its jump to a near five-month peak earlier this week.
The Aussie has climbed 10 percent versus the yen during March, poised for its biggest monthly rise since 1995, as growing stability in stock markets encourages investors to buy riskier and higher-yielding currencies.
The New Zealand dollar has been another beneficiary of such moves after government yields rose in a sign that investors were reining in expectations for lower rates.
The yen, on the other hand, had been battered due to views that Japan could be the slowest among major economies to recover from recession after a slew of dire economic data.
Figures on Friday showed that Japanese consumer price inflation has stalled and suggested the economy was edging toward deflation, while retail sales in February fell more than expected.
"Gains in yen crosses this week have been big and sharp, and traders naturally want to take a break before the weekend," said a senior trader at a Japanese brokerage firm.
The Nikkei average was little changed on Friday, with exporters such as Canon Inc climbing on growing optimism about a recovery in the U.S. economy but other stocks succumbing to profit-taking after rallies over the past two weeks.
U.S. stock futures edged down in Asian trade and pointed to a possible retreat in Wall Street later in the day, reducing some risk appetite that had helped the Australian and New Zealand dollars, traders said.
The dollar fell 0.5 percent from late U.S. trade on Thursday to 98.20 yen.
Traders said price action in Asian hours is likely to stay choppy as more flows are expected to come through the market before March 31, when many Japanese companies and investors close their books.
Japanese companies may also sell the dollar and euro in a last-minute attempt to hedge their overseas earnings before the book closings, they said.
"Flows related to the end of the business year and the quarter have made price movements volatile in recent days," said Kengo Suzuki, a currency strategist for Shinko Securities, adding that this had disrupted the recent correlation between higher stocks and a weaker yen and dollar.
Japan's budget for the new fiscal year is expected to be passed on Friday along with tax-related bills, according to domestic media.
The tax-related bills are expected to include a Japanese version of the U.S. Homeland Investment Act, which would allow corporations to repatriate funds held at overseas affiliates free of tax.
Market watchers said that while such a change is a potentially supportive factor for the yen, economic weakness was offsetting this.
"Changes to tax regulations is in theory yen-supportive, but the country's weak fundamentals is seen as a potential risk for anyone looking to buy the yen," said Takahide Nagasaki, chief forex strategist at Daiwa Securities SMBC.
The euro fell 0.1 percent to 133.40 yen, while it rose 0.4 percent against the dollar to $1.3586.
The New Zealand dollar lost 0.6 percent to 56.45 yen after climbing as high as 57.14 yen earlier, its highest since Nov. 11, on the Reuters dealing system.
The kiwi's gains earlier came despite data showing New Zealand's economy contracted in the fourth quarter at its fastest pace since September 1992, as the market had expected slightly worse figures.
The kiwi fell 0.3 percent to $0.5754, off a 10-week high of $0.5803 struck on Thursday.
The Australian dollar fell 0.9 percent to 68.64 yen, off a near five-month high of 69.60 yen touched on Tuesday. The Aussie fell 0.4 percent to $0.6996, below a 11-week peak around $0.7095 hit earlier this week. (Additional reporting by Shinichi Saoshiro; Editing by Edwina Gibbs)