Tokyo - Traders flocked to the yen in Asia Monday on growing worries about emerging economies, as a report suggested Asian central banks were intervening in forex markets to protect their currencies.

In Tokyo trade, the dollar slipped to 101.77 yen at one point in the morning before dip-buying pushed it to 102.44 yen.

That was slightly higher than 102.30 yen on Friday in New York, but well below the mid-103 yen range seen in Tokyo earlier that day.

The euro rose to 140.22 yen, also rallying from its morning lows, and up from 139.92 yen in New York.

The single currency inched higher to $1.3683 against $1.3678.

Fears of turmoil in emerging markets were sparked last week after Argentina's peso slumped 14 percent in two days, exacerbated by data indicating manufacturing activity in China - a key driver of global growth - had contracted in January.

“There is a fear that there is going to be a contagion in emerging-market currencies,” Maybank Kim Eng head of sales trading Kevin Foy said.

The growing pessimism sent investors to seek out safer, lower-return assets, particularly the Japanese yen, which is considered a safe haven in times of economic uncertainty.

The yen's strength Monday came despite data showing Japan's trade deficit hit a record $112 billion last year.

“A number of issues have all come together,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney.

Problems “have been bubbling away for a while now, but when they hit the screen at the same time, it appears like there is a problem in emerging markets”.

But Credit Suisse research analyst Hiromichi Shirakawa added that markets were not in a panic like in 2008 when the collapse of Lehman Brothers set off a global financial crisis.

“The euro's (stability) is working as a buffer and easing pressure on the yen to rise further,” Shirakawa said.

Traders will now focus on this week's Fed meeting to see if it announces any further cuts to its stimulus programme, which could aggravate fears of a capital flight away from emerging markets as investors look for safer investments.

The US central bank last month said it would reduce its bond-buying by $10 billion a month from January to $75 billion, citing a pick-up in the economy.

Dow Jones Newswires reported Monday that central banks in several Asian nations including Indonesia and Thailand appear to have stepped into forex markets to support their currencies, although none confirmed such moves.

The dollar was slightly higher at 12,240 Indonesian rupiah from 12,180 rupiah Friday, while it also rose to 62.72 Indian rupees from 62.16 rupees, to 45.42 Philippine pesos from 45.32 pesos, and to 32.91 Thai baht from 32.86 baht.

The greenback strengthened to 1,083.70 South Korean won from 1,076.70 won and to Tw$30.33 from Tw$30.22.

It edged down to Sg$1.2764 from Sg$1.2785.

The Australian dollar eased to 87.24 US cents from 87.59 cents, while the Chinese yuan weakened to 16.94 yen from 17.07 yen.

The Argentinian peso held steady at 8.00 to the dollar on Monday - compared with 8.01 - helped by the government's removal of some exchange controls and central bank intervention.

The Turkish lira dived through the key barrier of 2.3 to the dollar on Friday despite massive central bank help a day earlier.

The latest sell-offs in risky assets are an indication of declining confidence in the global economy, dealers said, a trend made worse by dismal US jobs figures this month and data showing a slowdown in emerging economies. - Sapa-AFP