Yen rallies on risk aversion after weak Chinese PMI data

Weak Chinese manufacturing data released today dampened investor sentiment leading to a boost in safe haven assets like the Japanese yen. Stock markets in Asia tumbled, while oil prices declined.

Tokyo’s benchmark Nikkei 225 index was down 0.69 per cent by mid-session trading, affected by the stronger yen, which hurts Japanese exporters.

Today’s data showed the official Chinese Purchasing Managers’ Index (PMI), which is a gauge of activity in factories and workshops, fell to 49.0 in February from 49.4 in January.

The data come after an announcement on Monday by China’s central bank to cut the RRR (reserve requirement ratio) of banks in an effort to help boost the slowing economy.

The dollar slipped to 112.41 yen from 112.72 yen in New York late Monday.

Also hitting sentiment, oil prices fell again after a rally in US trading stoked by major crude consumer China’s moves to tackle its slowing economy and Saudi Arabia welcoming cooperative action to stabilize the market.

Top oil producer Saudi Arabia suggested openness in reaching a coordinated solution to market volatility, as a global supply glut weighs on prices.

US benchmark crude for April fell seven cents to US$33.68 a barrel on Tuesday while Brent slid 19 cents to US$36.38 a barrel.

The post Yen rallies on risk aversion after weak Chinese PMI data appeared first on FXTM Blog.

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