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Yen firms in Asia on Europe fears

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(GlobalPost/GlobalPost)

The yen firmed in Asian trade on Friday as investors sought out the safe-haven currency following more weak eurozone data and owing to concerns about the debt crisis gripping Cyprus.

The gains were also helped after the Bank of Japan's new governor Haruhiko Kuroda quashed hopes for immediate easing measures as he held his first official news briefing Thursday.

In Tokyo morning trade, the dollar sat at 94.90 yen, against 95.01 yen in New York on Thursday while the euro fetched 122.56 yen from 122.58 yen.

The single European currency, which plunged Thursday on Cyprus worries, posted modest gains against the dollar to $1.2909, from $1.2902.

Yen-buying was stoked after the European Central Bank warned Cyprus it had until Monday to agree a new bailout plan with the European Union and International Monetary Fund, or emergency funding to Cypriot banks would be stopped.

That would likely cause the island nation's teetering lenders to collapse.

But the fears have been relatively contained, sparing the euro from a further losses on Friday, analysts said.

"Market sentiment turned negative as the Cyprus crisis deepened while the eurozone also saw some very disappointing (economic) data," Credit Agricole said in a note.

The "market seems relatively calm given the distinct risks of Cyprus exiting the eurozone, but we expect the uncertainty to continue to weigh on market sentiment".

Private business activity across the 17-nation bloc hit a four-month low in March, according to an index published by London-based Markit.

The report pointed to weakness in manufacturing, services and new business, while analysts also expressed concern over fresh private-sector data from Germany that suggested the eurozone's strongest economy may be faltering.

In Japan, remarks from top BoJ officials including Kuroda produced no surprises, with dollar-yen trade lacking a "clear direction", Citibank Japan chief forex strategist Osamu Takashima told Dow Jones Newswires.

Some had expected Kuroda to call an emergency policy board meeting that would usher in aggressive new easing measures.

However, Kuroda declined to comment on any such plans, but pledged "all-out efforts" to rid Japan of growth-sapping deflation that has plagued the economy for years.

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http://www.globalpost.com/dispatch/news/afp/130322/yen-firms-asia-europe-fears