[TOKYO] Higher risk currencies rose in line with a regional stock rally on Wednesday as an upbeat Chinese trade report provided some rare confidence to regional markets.
The Malaysian ringgit, Australian dollar and Indonesian rupiah led advances against the dollar, while traders also shifted out of the safe-haven yen in the most positive trading day of 2016.
Global markets have been in freefall since the beginning of the year, owing to increasing worries about a growth slowdown in China - a key driver of world growth - and plunging oil prices.
That sparked a flight to low-risk assets such as the dollar and yen.
But, on Wednesday, news that China's exports had picked up in December was mixed with a rebound in oil prices from 12-year lows below US$30.
"It looks as if the situation in China has been put in order for the time being, but with oil still a worry, it's difficult for risk sentiment to improve," Masato Yanagiya, head of foreign-exchange and money trading at Sumitomo Mitsui Banking, told Bloomberg News.
The oil-reliant ringgit and Australian dollar each climbed 0.7 per cent against the US dollar, while the rupiah gained 0.5 per cent. South Korea's won added 0.5 per cent and the Singapore dollar was up 0.4 per cent.
The yen also retreated, having climbed more than two percent against the dollar so far this year. The greenback bought 118.29 yen, well up from 117.66 yen in New York, while the euro strengthened to 128.06 yen from 127.76 yen.
The single currency weakened to US$1.0825 from US$1.0858.
Investors are now focusing on the release later Wednesday of the Federal Reserve's Beige Book report on the state of the US economy hoping for some forward guidance on its plans for interest rates after December's first hike in almost a decade.
Markets are anticipating only two increases in 2016 but the latest global market volatility has led some to predict there would be only one.