Worries over emerging economies cause Asia traders to flock to yen


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 US$1.3683 against US$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. 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 US$112 billion last year.

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 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. It edged down to SG$1.2764 from SG$1.2785. The Australian dollar eased to 87.24 U.S. cents from 87.59 cents, while the Chinese yuan weakened to 16.94 yen from 17.07 yen.