Dollar up in Asia on manufacturing data

TOKYO- The dollar extended its gains against the yen in Asia Wednesday after upbeat manufacturing data from the United States and Europe boosted sentiment ahead of key US jobs figures this week.

In Tokyo midday trading, the greenback fetched 103.83 yen, from 103.66 yen in New York Tuesday.

“The 104 yen mark is well in sight within today, despite caution ahead of US jobs report due on Friday,” a senior dealer at a Japanese bank told Dow Jones Newswires.

The euro rose to 143.30 yen from 142.98 yen, while also edged up to $1.3801 from $1.3793.

Regional sentiment was already up after China’s said Tuesday its official purchasing managers index ticked up in March after hitting an eight-month low in February, beating expectations.

Later, Markit Economics said its eurozone PMI for March stood at 53.0. The figure is down from February’s 53.2 but the average reading over the first quarter as a whole was 53.4, which it said was the “best outcome since the second quarter of 2011”.

A reading above 50 denotes expansion while anything below points to contraction.

Then the US Institute for Supply Management said its PMI hit 53.7 from 53.2 the previous month. ISM also said comments from businesses surveyed “reflect favorable demand and good business conditions”.

The upbeat slate of data spurred dollar buying and a move away from the yen, which investors tend to scoop up in times of uncertainty and turmoil.

The US data “was enough to convince investors that the US economy continues to gather momentum after the period of severe weather” at the start of the year, Credit Agricole said.

The euro’s move higher came a day before the European Central Bank holds a policy meeting, with the market backing off earlier expectations of a move to ease rates to address low inflation.

Analysts are increasingly of the view that the ECB will stand pat at its meeting on Thursday, despite eurozone inflation slipping to 0.5 percent in March, the lowest rate since October 2009 at the height of the financial crisis.

The bloc’s inflation rate has trended steadily lower in recent months, coming in well below the ECB’s target rate of just under 2.0 percent, and fueling concerns of deflation.