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Yen picks up as falling oil prices dent sentiment


yenThe yen picked up Wednesday as caution returned to markets after oil prices resumed their slide, while traders speculate over the odds of the Bank of Japan unleashing fresh stimulus.

After surging in New York, oil prices turned lower in response to news a strike in major producer Kuwait had been wound up.

The walkout had provided some much-needed support to crude, after the collapse of weekend talks between OPEC and non-OPEC giants aimed at limiting production sent prices tumbling.

The reversal took the wind of out Asia-Pacific equity markets and pushed cautious investors into the Japanese currency — seen as a safe bet in times of turmoil.

In Tokyo, the dollar edged down to 108.95 yen from 109.20 yen on Tuesday in New York.

Japan’s central bank meets next week on the back of growing speculation policymakers could unleash more stimulus following deadly earthquakes that have threatened the already fragile economy.

“There’s a good likelihood that the BoJ will increase their asset purchases,” Tim Condon, head of Asia research in Singapore at ING Groep, told Bloomberg News.

“Negative rates backfired on them,” he added, referring to the BoJ’s widely criticised move to introduce negative interest rates to kickstart the economy in January.

The euro also weakened to 123.93 yen against 124.04 yen on Wednesday, while it rose to $1.1363 from $1.1359.

In other trading, emerging currencies broadly retreated with the Thai baht, Indonesian rupiah, Philippine peso and Taiwan dollar all sinking against the greenback.

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