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Euro extends rally in Asian trading

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(Globalpost/GlobalPost)

The euro extended its rally in Asia on Friday as markets eye US jobs data later in the day, after a surprise GDP report showed the world's biggest economy contracted in the last quarter of 2012.

The single currency bought $1.3622, from $1.3576 in New York trade on Thursday while it fetched 125.59 yen, compared with 124.52 yen in New York.

The greenback edged up on the Japanese unit at 92.17 yen, from 91.70 yen in US trading.

The dollar has been under pressure as data showed the US economy contracted 0.1 percent in the last quarter of 2012, while a surge in eurozone confidence also helped the 17-nation euro.

Eyes are on the release on Friday of non-farm payroll figures, with traders looking for fresh clues as to the state of the economy. US consumer confidence, construction spending and vehicle sales are also expected.

The euro pushed sharply higher this week, topping the $1.35 level on Wednesday for the first time in 13 months after the European Union's eurozone confidence index jumped for a third straight month.

Its brief climb above 125 yen on Friday was the first in over two-and-a-half years.

The yen has fallen sharply in recent months as Japan's new conservative government and the central bank set their sights on a newly adopted two-percent inflation target to beat the country's long-running deflation.

"The yen has continued to slide in response to the government's stronger commitment to restoring competitiveness and growth and in anticipation of more aggressive easing from the Bank of Japan," London-based Capital Economics said.

"The fall...has in turn boosted Japanese equities, although both moves have also reflected the global improvement in sentiment in financial markets."

The yen's slide, on the back of further easing from the Bank of Japan, has stoked criticism overseas that Tokyo is orchestrating a yen devaluation.

Japanese officials have rejected the accusations and warnings that it is risking setting off a global currency war.

The dollar was mostly firmer against other Asia-Pacific currencies, rising to Sg$1.2422 from Sg$1.2391 on Thursday, to Tw$29.64 from Tw$29.56 and to 1,095.65 South Korean won from 1,089.30 won.

The greenback edged up to 40.70 Philippine pesos from 40.65 pesos and to 53.33 Indian rupees from 53.14 rupees.

But it weakened to 9,695 rupiah from to 9,740 rupiah.

The Australian dollar bought $1.0398 from $1.0393, while China's yuan fetched 14.81 yen against 14.60.

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http://www.globalpost.com/dispatch/news/afp/130201/euro-extends-rally-asian-trading