Greenback gains in Asia

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Tokyo - The dollar rose in Asia on Monday as upbeat Chinese manufacturing data lifted investor sentiment ahead of key US jobs data later this week, while weak Japanese economic data weighed on the yen.

In midday Tokyo trading, the greenback fetched 102.04 yen compared with 101.75 yen in New York on Friday afternoon.

The euro rose to 139.08 yen from 138.75 yen, while it weakened to $1.3626 against $1.3630 in US trade ahead of this week's European Central Bank board meeting that many expect will see an easing of monetary policy.

On Sunday, the Chinese government released data showing manufacturing activity strengthened to a five-month high in May, an optimistic sign amid slumping growth in the world's second-largest economy.

The official purchasing managers index (PMI) reached 50.8 in May, the National Bureau of Statistics said in a statement, up from 50.4 in March.

The index tracks manufacturing activity in China's factories and workshops and is a closely watched indicator of the health of the economy. A reading above 50 indicates growth.

A report Friday showed that US consumer spending dipped slightly in February, but the figures were mostly dismissed by economists who pointed to a large jump the month before.

With few other immediate trading cues, investors were looking to a string of data releases this week - including US jobs figures - as well as the European Central Bank meeting.

“Thursday's ECB meeting and Friday's US payrolls report dominate the international skyline,” National Australia Bank said.

Financial markets are betting on an interest rate cut from the ECB as fears over deflation in the 18-nation eurozone stir policymakers to act, which would tend to weigh on the euro.

On Friday, weaker Japanese household spending and factory output highlighted the negative impact of last month's sales tax rise, raising the possibility of further action from the Bank of Japan to counter any downturn in the world's number three economy.

The International Monetary Fund said Friday that the BoJ may need to keep its foot on the stimulus pedal for longer than many expect.

“The current aggressive pace of monetary easing may need to be maintained for an extended period,” said the IMF's annual report on Japan's economy, which was published Friday. - AFP


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