Yen near this year's lows as risk appetite improves

[TOKYO] The yen hovered near its lowest level this year on Monday as more signs of stabilisation in the Chinese economy and an upbeat start to the US earnings season prompted investors to abandon the safe-haven currency to seek higher returns elsewhere.

The US dollar firmed to 112.02 yen, near Friday's high of 112.10, which was near its year-to-date high of 112.135 touched in early March.

The safe-haven Swiss franc has also eased against the euro, which strengthened to 1.1329 franc, recovering its losses made late last month to hit a three-week high on the franc.

The common currency traded at US$1.1304, keeping intact its slow recovery from US$1.1183 touched on April 2. It rose to as high as US$1.1324 on Friday.

Chinese data published on Friday showed exports rebounded sharply and new bank loans increased far more than expected in March.

Although China's imports remained weak, the data on the whole cemented hopes that the Chinese economy is bottoming out after a soft patch as Beijing has curbed de-leveraging efforts and stepped up support for the economy in recent months.

US stocks also rallied on Friday on strong earnings from JPMorgan and an 11.5-per cent jump in Walt Disney Co on news that it will start streaming services.

The S&P 500 index has reached its highest level in six months, coming within sight of testing a record high marked in September last year.

The more positive mood helped offset any concerns about upcoming trade talks between the United States and Japan, in which Washington is expected to include a currency provision in a bilateral trade agreement.

"We are seeing a classical risk-on market," said Minori Uchida, chief currency analyst at MUFG Bank.

But Mr Uchida also believes the US dollar's upside may be limited, given that speculators have already built up large long positions in the US currency.

Data from US watchdog on Friday showed speculators bolstered their net long US dollar position in the latest week, pushing it to the highest since December 2015.

Against the yen, their net US dollar long position was at the highest in about three months.

Elsewhere, the Australian dollar stood at US$0.7173, having hit a 1-1/2-month high of US$0.71925.

The British pound fetched US$1.3080, stuck in its recent trading range as fears of a no-deal Brexit have receded for now.

REUTERS