Yen up in Asia before ECB meeting

Tokyo - The yen ticked up in Asia on Thursday as cautious investors bought the unit on the back of weak US jobs data and ahead of the European Central Bank's policy meeting.

In Tokyo midday trading, the greenback weakened to 102.55 yen from 102.74 yen in New York, while the euro drifted to 139.45 yen from 139.68 yen.

File picture: Eugene Hoshiko. Credit: Associated Press

The European single currency also edged to $1.3597 from $1.3599 with ECB policymakers widely expected to cut the bank's key interest rates and unveil other unconventional measures in a battle against deflation.

In the US on Wednesday, the dollar was initially buoyed by broadly upbeat data. The Institute for Supply Management said activity in the services sector surged in May.

Also, the Federal Reserve's “Beige Book” report said all 12 districts of the country saw increasing economic activity in recent weeks. That compares with April's report, which showed two districts saw a decline in activity.

However, payrolls company ADP said the US private sector created a net 179 000 new jobs in May, its lowest level in four months, renewing the focus on Friday's official jobs report.

“The theme of the market remains one of cautiousness ahead of the important events (and) releases today and tomorrow,” Credit Agricole said, adding that the ADP report “cast a shadow on the optimistic forecasts for Friday's official number”.

It added: “All eyes will be on the ECB with market participants expecting concrete actions after the central bank effectively pre-committed itself in the last meeting and amid another round of downward-surprising inflation numbers.”

After effectively pre-announcing a move last month and carefully priming financial markets for action, the ECB is finally expected to deliver at its regular monthly policy meeting later on Thursday.

A slew of recent economic data - including disappointing growth and slowing inflation - has hardened the case for decisive measures.

Official data on Tuesday showed eurozone inflation slowed sharply to 0.5 percent in May, from 0.7 percent in April and far weaker than the ECB's target of just below 2.0 percent.