TOKYO: The yen slipped in Asia on Tuesday as confidence was boosted by better-than-expected Chinese growth data, while the euro struggled against the dollar on expectations for more European Central Bank stimulus.
In Tokyo, the dollar rose to 118.30 yen against 117.53 yen in London on Monday, while the euro edged up to 136.98 yen from 136.69 yen.
The single currency weakened to $1.1577 from $1.1630.
Official data Tuesday showed China's economy -- the world's second biggest -- expanded 7.4 percent in 2014. While that marked the lowest annual growth in 24 years, it beat a 7.2 percent median forecast in an AFP survey of 15 economists.
"Markets took Chinese data to be slightly stronger than expected," Shusuke Yamada, a strategist at Bank of America Merrill Lynch in Tokyo, told Bloomberg News.
"That's underpinning (the) dollar-yen which is seen to have a firm correlation with risk sentiment."
Investors tend to move into the yen during times of uncertainty and turmoil.
ECB policymakers hold their much-anticipated meeting on Thursday and analysts broadly expect it to announce a bond-buying scheme aimed at kickstarting lending in the struggling eurozone.
Those expectations have hammered the euro, which last week fell below $1.1500 for the first time in more than 11 years before recovering slightly.
Chronically low inflation across the eurozone has fuelled concern the region could slip into deflation -- a sustained and widespread drop in prices -- and has led to speculation that the ECB would be forced to act.
But the euro may drift higher if details of the bank's stimulus fail to surprise investors, said Yuji Kameoka, chief foreign exchange strategist at Daiwa Securities.
"The euro has limited downside in the near-term given that markets already priced in the ECB's bond buying," he said.
Dealers are also keeping an eye on Greece where an anti-austerity party is leading opinion polls ahead of a general election at the weekend, leading to fears the country could eventually exit the eurozone.
The dollar strengthened against other Asia-Pacific currencies.
It rose to 1,085.60 South Korean won from 1,077.00 won on Monday, to Sg$1.3379 from Sg$1.3276, and to 12,640.00 Indonesian rupiah from 12,600.30 rupiah.
The dollar also firmed to Tw$31.59 from Tw$31.50, to 32.71 Thai baht from 32.55 baht, and to 61.79 Indian rupees from 61.67 rupees. It was flat at 44.67 Philippine pesos.
The Australian dollar slipped to 81.76 US cents from 82.10 US cents, while the Chinese yuan firmed to 19.01 yen from 18.83 yen.
Comments
Comments are closed.