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Yen hits 2-week high against dollar on soft China PMI

The yen rose to a two-week high against the dollar on Monday after a survey showed China's manufacturing activity contracted for a fourth straight month, bolstering the safe-haven Japanese currency.

In Europe, the biggest mover was the Swedish crown, which lost ground after a report showed industrial production weakening. That puts pressure on the Riksbank to cut rates when it meets next in July.

The focus was on the dollar, though. An encouraging report on U.S. payrolls numbers on Friday initially boosted the dollar, but it erased those gains as investors focused on less promising labor force and wages data. The crisis in Ukraine also took a toll.


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The dollar lost further ground against the yen after a private survey showed China's manufacturing activity remained weak in April, adding to signs that the world's second-largest economy is losing momentum.

The greenback fell as low as 101.86 yen, its weakest since April 17 and down more than 1 yen from Friday's near one-month high of 103.025 yen on trading platform EBS. It was last trading near 102, down modestly on the day, with volumes low.

Further undermining the dollar was a drop in U.S. Treasury yields, particularly at the long end. The benchmark ten-year yield plumbed a three-month low of 2.57 percent and was last at 2.575 percent.

The yen rose broadly, with the euro shedding 0.2 percent to 142 yen, and the Australian dollar 0.2 percent to 94.64 yen.

The euro was steady versus the dollar around $1.39. With the European Central Bank likely to keep rates unchanged on Thursday after inflation climbed in April, investors could push the euro towards $1.39/1.3950 in the latter part of the week.

The euro rose against the Swedish crown after dismal data from Sweden. It rose to almost 9.09 crowns on a report that Swedish industrial production fell 3.8 percent in March, making a sharp slowdown and a cut in interest rates more likely.

--By Reuters

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