Yen under pressure in Asia on easing speculation

The yen was under pressure in Asia Tuesday as speculation grows that a new leadership team at the Bank of Japan will launch fresh easing measures, while the dollar was supported by upbeat US jobs data.

In morning Tokyo trade, the dollar strengthened to 96.58 yen, from 96.26 yen in New York Monday, while the euro also gained on the Japanese currency at 125.85 yen from 125.59 yen, after touching 126 yen in earlier Asian trading.

The single currency fetched $1.3031, weakening from $1.3046 after fresh European fourth quarter 2012 growth data confirmed the continuing recession, though Greece's contraction was less severe than earlier estimated.

The dollar, meanwhile, was supported by better-than-expected economic data as investors look for signs of a firm recovery.

Friday's strong US jobs data "changed the picture for the dollar/yen" and "expectations of US economic recovery are strong", said Daisaku Ueno, senior foreign exchange strategist at Mitsubishi UFJ Morgan Stanley.

Haruhiko Kuroda, a finance veteran who is Tokyo's choice to head the Bank of Japan, has said under his stewardship the BoJ would move to meet a two-percent inflation target that policymakers adopted in January, aimed at reversing years of falling prices that have crimped private spending and business investment.

Kuroda and his proposed deputies support aggressive easing measures to stoke growth, which tends to weigh on the value of the yen. That helps Japanese exporters although the unit's recent decline has drawn criticism from overseas, particularly in Europe, that Tokyo was engineering a yen devaluation.

A report in Japan's leading Nikkei economic daily Tuesday, which suggested the BoJ nominees might launch fresh easing measures before their first policy meeting next month, heaped pressure on the yen, dealers said.

"The dollar/yen has climbed this morning based on the report," Citibank Japan chief FX strategist Osamu Takashima told Dow Jones Newswires.

The US Labor Department reported last week that the world's largest economy generated a net 236,000 new jobs in February, far more than expected, pulling the unemployment rate down to 7.7 percent from 7.9 percent.

Forex markets would now focus on another string of US data this week, including retail sales and industrial production numbers and weekly jobless claims, analysts said.