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Yen climbs on safe-haven demand, dollar falls broadly

Sha Ying | CNBC

The yen rose against the dollar and the euro on Tuesday, rebounding from losses as falling stock markets worldwide prompted safe-haven demand for the Japanese currency.

The dollar slipped against the euro and a basket of currencies but the decline could be short-lived on a view that the Federal Reserve may begin to reduce its huge bond-buying economic stimulus earlier than some had anticipated.

After a strong U.S. ISM factory report on Monday, investors are now looking to U.S. economic growth data on Thursday and, in particular, U.S. nonfarm payrolls numbers on Friday for further signs of when the Fed may act.

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The dollar fell 0.4 percent to 102.54 yen after reaching 103.37 yen in Asian trading, according to Reuters data. That was close to its 2013 high of 103.73 yen, a level dollar bulls have been targeting.

The euro retreated from a five-year high of 140.03 yen to 139.16 yen, down 0.2 percent on the day.

Against the dollar, the euro rose 0.2 percent to $1.3573 on expectations the European Central Bank would leave interest rates unchanged this week after above-forecast inflation data last Friday.

Against a basket of currencies, the dollar index lost 0.4 percent to 80.593.

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