Business Market 02 Feb 2016 Oil price fall, weak ...

Oil price fall, weak China data fuel yen-buying in Asia

AFP
Published Feb 2, 2016, 12:44 pm IST
Updated Feb 2, 2016, 12:44 pm IST
China's official purchasing managers' index fell to its lowest level since August 2012.
Representational Image
 Representational Image

Tokyo: The yen got a lift Tuesday while emerging currencies took a hit as a renewed fall in oil prices and weak China data clobbered market sentiment. Crude extended its losses in Asia as hopes for a deal among producers to cut output fizzled out.   

Data Monday showed China's official purchasing managers' index, which tracks activity in factories and workshops, fell to its lowest level since August 2012.      

 

 A slowdown in China delivered a one-two punch, fuelling worries about the powerhouse economy's energy demands as well as broader fears about the global economy.

"We're in for a period of continuing caution," Angus Gluskie, a managing director at White Funds Management in Sydney, told Bloomberg News. "It's a period of uncertainty. China remains the biggest concern for investors. If the Chinese situation develops more adversely, it could have greater ramifications."

That pushed up yen-buying as investors sought out a currency seen as a safe haven in times of uncertainty and turmoil.

 

In Tokyo the dollar ticked down to 120.59 yen from 120.96 yen in New York, although it was still up from 118.60 yen on Friday before the Bank of Japan announced a new stimulus policy.

The euro was down to 131.48 yen against 131.76 yen, while the 19-nation currency edged up to $1.0903 from $1.0893 in US trade.

Emerging currencies were broadly lower. The oil-linked Malaysian ringgit was down almost one percent against the dollar, while the Thai baht fell 0.50 percent, and the South Korean won slipped nearly 0.60 percent. The Taiwan and Singapore dollars also edged down against the greenback.

 

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