SINGAPORE- The yen rose against the dollar in Asia Monday as concerns over the global economy sent traders fleeing to safer investments, analysts said.
The dollar slipped to 107.15 yen in midday Singapore trade from 107.65 yen in New York late Friday.
Japanese financial markets are closed for a public holiday.
The euro was at $1.2692 from $1.2627 and fetched 136.01 yen from 135.97.
“Global growth worries continue to drive currency markets,” Singapore’s biggest lender DBS Bank said in a note.
“Falling US stock indices and bond yields, coupled with lower oil and commodity prices, have raised doubts over whether the US economy can de-couple from the weaknesses in other major economies, namely the eurozone and Japan,” it said.
“This is important because speculators have been loading up on US dollars against the major currencies on the relative strength of the US economy.”
DBS said the yen “has been reprising its role as a safe haven currency amidst risk aversion”.
Malaysia’s CIMB bank said the euro is under pressure because of “weaker economic prospects in both France and Germany”.
Germany, Europe’s biggest economy, has been hit by unexpectedly sharp falls in factory orders, industrial output and exports, while leading think tanks cut sharply their growth forecasts for both this year and next.
Last week, ratings agency Standard & Poor’s lowered its outlook for France from “stable” to “negative” on fears over the country’s budget situation. CIMB said this “may continue to exert near term pressure on the euro”.
Standard & Poor’s said the French government’s budgetary position was “deteriorating”.
International Monetary Fund chief Christine Lagarde on Thursday warned that there was a 35-40 percent chance of the eurozone slipping back into recession if action is not taken to prevent it. The Fund last week also cut its forecast for global growth in 2014 and 2015.