Yen rises in Asia after upbeat Japan inflation data

28/03/2014 08:11 AST

TOKYO: The yen inched higher in Asia on Friday after Japan published upbeat inflation data which reduced the immediate likelihood of more easing measures from the Bank of Japan.

In afternoon Tokyo trade the dollar bought 102.15 yen, compared with 102.17 yen on Thursday in New York where it was boosted by better-than-expected US economic data.

The euro was worth $1.3743 and 140.35 yen against $1.3742 and 140.41 yen.

Trading was cagey after the UN General Assembly on Thursday adopted a Western-backed resolution that declared Crimea's breakaway from Ukraine this month as illegitimate and refused to recognise Russia's control of the peninsula.

"Geo-political tensions... continued to loom after President (Barack) Obama's warning of more sanctions on Wednesday, and overall we expect sentiment to remain subdued ahead of the weekend," Credit Agricole said.

The yen won support as official data showed Japanese inflation in February at 1.3 percent, matching forecasts from the Bank of Japan, which has targeted a 2.0 percent rate by next year as it works to reverse years of deflation. The government also said the jobless rate had fallen to a more than six-year low of 3.6 percent.

The inflation figures are seen as key to whether the BoJ unleashes further monetary easing, with the strong reading reducing the likelihood that more policy moves were imminent, which tends to boost the yen.

Earlier this month, the BoJ held off fresh measures, saying the economy was picking up, despite slowing growth in the last quarter of 2013 and fears that a tax hike in April will dent the recovery.

The dollar rose Thursday after the US Commerce Department increased its estimate of economic growth in October-December to 2.6 percent from 2.4 percent, with the gain helped by stronger-than-expected consumer spending.

The euro faced selling pressure as the European Central Bank reported bank lending to businesses fell 2.2 percent year on year in February, stirring concerns about the strength of the 18-member bloc's economy.

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