Yen looks stronger, euro mixed

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IOL pic jan21 asian markets yen Associated Press File picture: Eugene Hoshiko

Tokyo - The yen got a boost in Asian trade on Wednesday after a global stock market rout spooked investors ahead of key US jobs data.

At midday in Tokyo, the dollar bought 101.27 yen, weakening from 101.64 yen on Tuesday in New York.

The euro was mixed at $1.3516 and 136.87 yen, against $1.3515 and 137.36 yen, as speculation grows that the European Central Bank might cut interest rates after its Thursday policy meeting.

Traders moved into the Japanese currency, seen as a safe haven in times of turmoil, after weak US data compounded worries about emerging markets and stoked a global equity market sell-off this week.

“The mood of cautiousness will likely linger,” Credit Agricole said.

“Key to the market tone will be today's ADP employment report and a solid release will soothe concerns on US growth caused by the disappointing... data earlier this week.”

US currency markets were jolted after unexpectedly weak US manufacturing data on Monday raised concerns about the world's number one economy.

The Institute for Supply Management's purchasing managers index sank to 51.3 in January from 56.5 in December. A figure above 50 indicates growth and anything below points to contraction.

On Tuesday, data showed new orders for US manufactured goods fell 1.5 percent in December, reversing November's gains.

Now, investors are keeping an eye on the ADP private-sector employment report for January, due later in the day, which comes ahead of Friday's official non-farm payrolls figures.

The jobs data will help markets gauge the state of the US economy as the Federal Reserve winds down its stimulus, citing a firming recovery.

The Fed announcement rattled emerging markets such as India, South Africa and Russia on fears of a capital flight, which in turn sent their currencies diving.

Poor China data has also dampened investors' spirits, dealers said. - AFP

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