The perennial safe-haven yen logged solid gains against the dollar and euro in Asian trade on Tuesday as risk appetites waned, and downbeat Chinese trade data fuelled concerns about the state of global demand. China's February exports disappointed analysts' expectations, falling 25.4 percent from a year earlier, while imports fell by 13.8 percent.
The dollar skidded against the yen, giving up about 0.5 percent to 112.90 yen, after earlier hitting a one-week low of 112.75 yen. The euro dropped about 0.4 percent to 124.47 yen. "The dollar/yen is a bit soggy today," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo. "There are still plenty of people who want to sell the dollar, and lock in their recent gains."
Data released early in the session showed Japan's economy contracted an annualised 1.1 percent in the final quarter of 2015, less than the initially estimated 1.4 percent contraction, though private consumption remained weak. The Australian and Canadian dollars pulled away from multi-month highs touched on a rally in commodity prices, which faded as investors took profits.
The Aussie fell about 0.5 percent to $0.7427 after reaching an overnight high not seen since July, of $0.7486. Its Canadian peer climbed as far as C$1.3262 per USD, scaling a peak last seen in November, but the greenback was last up 0.3 percent at C$1.3323. On Monday, Brent crude jumped more than 5 percent to above $40 a barrel for the first time this year on growing hopes of a production freeze in an over-supplied market, though it was down more than 1 percent in Asian trading. The euro edged up about 0.1 percent to $1.10220, holding steady after a recent recovery from a one-month low of $1.08255 struck on March 2.
The euro's outlook remained clouded by Thursday's policy review by the European Central Bank (ECB). The ECB is widely expected to ease, but investors are uncertain about how far the central bank will go. Euro bears are cautious about positioning for bold action, having been badly burnt before when the ECB disappointed by choosing to take more modest easing steps.
"We think the central bank will once again struggle to beat high expectations, with the euro not likely to suffer significantly after the announcement," analysts at BNP Paribas wrote in a note to clients. The Bank of Canada and Reserve Bank of New Zealand also hold policy meetings this week, but no action is expected. Markets are giving only a small chance of a rate cut by the RBNZ. Many analysts instead expect a dovish statement to accompany a no-change decision. That kept the kiwi from joining the overnight rally in commodity currencies. It was last at $0.6772, down about 0.4 percent and moving away from a two-month high of $0.6820 on Friday.
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