Yen weakens on bank speculationComment on this story
Tokyo - The yen eased in Asia on Monday as surprisingly weak Japanese factory output boosted speculation that the Bank of Japan would expand its stimulus programme to prop up the world's number-three economy.
In midday Tokyo trade, the dollar crept up to 102.83 yen from 102.80 yen in New York on Friday.
The euro bought $1.3750 and 141.41 yen compared with $1.3752 and 141.38 yen.
Official data showed Japan's industrial output in February fell 2.3 percent month-on-month following a 3.8 percent expansion in January. Economists had widely predicted a 0.3 percent rise.
“Today's data show that Japan's manufacturing sector lost some speed ahead of (Tuesday) increase in the consumption tax,” Capital Economics said.
The data weighed on the yen as it could nudge the Bank of Japan towards widening its asset-buying stimulus, which was put in place last year to kickstart the economy.
The dollar was also being supported by data showing US consumer incomes and spending gained for a second straight month in February.
Focus is now on the release Tuesday of the BoJ's Tankan survey of Japanese business sentiment while the US Labour Department will on Friday unveil closely watched non-farm payrolls data for March.
Eurozone inflation figures are due later on Monday. With recent data showing prices rises remain weak, the latest release will put the spotlight on the European Central Bank as it prepares for its next policy meeting on Thursday.
“We do not believe the ECB can afford to do nothing this week, having intentionally raised hopes of fresh monetary easing,” Credit Agricole said, adding that “at some point the market will ask for more than dovish words”.
Investors are also tracking events in Europe as the top diplomats from the US and Russia hold talks to find a solution to the crisis in Ukraine.
While the two failed on Sunday to reach a breakthrough in Paris they did agree to keep talking after what were described as “frank” and “constructive” negotiations. - Sapa-AFP