Euro tumbles in Asia

The euro slid to a nine-year low against the dollar on Wednesday as investors braced for inflation data that should give doves at the European Central Bank a clear mandate for bolder policy stimulus.
The common currency sank as deep as $1.1842, its lowest since March 2006. Traders said some sell stops were triggered after the currency broke below Monday's trough of $1.1861.
Data due at 1000 GMT is expected to show consumer prices in the euro zone fell in December year on year, the first such drop since 2009.
"The data should be supportive of expectations for ECB QE operations to begin in January. We remain short EURUSD heading into this data," analysts at BNP Paribas wrote in a note to clients, referring to quantitative easing or a wide scale bond buying programme.
The dollar, meanwhile, trimmed some losses against the safe-haven yen amid a slight lull in the recent flight-to-quality bids. Tokyo's Nikkei edged up after posting its biggest fall in 10 months the previous day and other Asian bourses also posted modest gains.
After slipping as low as 118.05 yen overnight, the dollar last traded at 119.12 yen, up 0.6 percent on the day.
Still, the dollar remained far from its 9-year peak of 121.86 hit last month as persistent weakness in oil prices and the prospect of deflation in Europe have continued to fuel investor demand for government bonds like US Treasuries.
The recent fall in Treasury yields has given currency players an incentive to sell the dollar against the yen. The US 10-year yield fell to a 12-week low of 1.887 percent overnight.
The Japanese 10-year yield has also dropped in the wake of the heightened risk aversion, reaching a new record low of 0.265 percent on Wednesday.
But this phenomenon, which should diminish the yen's attraction, has been overshadowed by the faster decline in Treasury yields. The US 10-year yield has dropped by more than 20 basis points this month, while its Japanese counterpart has fallen 5 basis points.
"The yield curves of most sovereign debt markets are bull flattening so the fall in JGB yields has not attracted much attention," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.
Markets are also looking out to the Federal Reserve's December meeting minutes due later in the session to gauge the central bank's stance on the timing of its first rate hike, which could occur later this year.
The divergence of monetary policies between the Fed and those of the ECB and the Bank of Japan provided a strong boost to the dollar last year.
"The Fed may not hike rates until June at the earliest. That is too far ahead for participants to make bets on, so meantime market focus rests on the ECB's (January 22) meeting and the BOJ, which continues to instil fear due to its unpredictability," Suzuki at Societe Generale said.
A standout performer was the New Zealand dollar, which rose broadly after international milk prices climbed again at a fortnightly auction, in part because of supply concerns.
The currency of the world's largest dairy exporting country rose to $0.7808, pulling well away from Monday's low of $0.7619. It has since trimmed its gains and was last $0.7751.
The kiwi also rallied against its Australian peer, which slid as far as NZ$1.0383 to an all-time low. The Aussie last traded at NZ$1.0404.
Traders suspect the kiwi will reach parity with its Australian peer before long.