CURRENCIES Archives | Email alerts July 1, 2013, 12:27 a.m. EDT Japan’s yen regains ground after sentiment survey Stories You Might Like China average home prices rise in June Most Asia stocks drop on China data; Japan rises Arizona blaze kills 19 firefighters: reports

By Carla Mozee, MarketWatch

LOS ANGELES (MarketWatch) — The Japanese yen modestly gained ground Monday after an upbeat reading on sentiment among Japanese businesses, while the Australian dollar also edged up in the wake of a losing quarter against the U.S. dollar.

The U.S. dollar USDJPY +0.3819% briefly climbed from 99.35 yen to ¥99.42 after the widely watched tankan survey from the Bank of Japan showed an improvement in sentiment at both large manufacturers and non-manufacturers during the April-June quarter.

But the dollar later eased back to ¥99.35, though still above its ¥99.26 level late Friday in North America.

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The Japanese yen finds support from an upbeat reading of the tankan business-sentiment survey.
Among the tankan results, the reading for large manufacturers turned broadly positive for the first time in almost two years.

The survey was the first since the Bank of Japan launched an aggressive monetary easing program on April 4 in an effort to push consumer inflation up to a 2% rate following years of deflation.

The dollar on Friday traded above ¥99 for the first time since early June, according to FactSet data. Last month, the greenback fell 1.3% versus the yen, but rose nearly 6% for the second quarter and was up by about 15% on a year-to-date basis.

The Australian dollar AUDUSD +0.9098% kicked off July on slightly stronger footing, buying 91.71 U.S. cents, up from 91.53 U.S. cents late Friday in North America.

The Aussie had been trading around 91.39 U.S. cents when the Chinese government released a survey indicating further slowing in manufacturing activity in June. But the reading of 50.1 matched the projection from Dow Jones Newswires survey, supporting a gain for the currency.

The Aussie was able to keep its uptrend after HSBC said its own Chinese factory-activity index fell to the lowest level since September 2012.

Australia’s currency tends to be sensitive to Chinese data, as China is a key consumer of iron ore and other natural resources.

The Australian dollar will be in focus Tuesday, with an interest-rate decision expected from the Reserve Bank of Australia.

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The Australian central bank is widely expected to keep the cash rate at 2.75%. But economists at Nomura said late last week they foresee the bank lowering the rate by a quarter-percentage point to 2.5% on Tuesday, and to also retain its easing bias.

“We also expect the RBA to cut again later this year (likely October or November), as we anticipate continued signs of weakness in the domestic economy,” Nomura said.

After a May rate cut by the RBA to the record low of 2.75%, the Aussie began its descent below the $1 level against the U.S. currency. It finished the second quarter with 12% drop, the worst quarterly loss since the third quarter of 2008.

The ICE dollar index DXY -0.10% , which measures the U.S. unit against six other major currencies, on Monday slipped to 83.147 from 83.194 late Friday.

The WSJ Dollar Index XX:BUXX -0.04% , a rival gauge with a slightly wider comparison basket, was at 75.02, down slightly from 75.04.

Meanwhile, the euro EURUSD +0.1989% won back ground against the buck, trading at $1.3023, up from $1.3013.

The dollar and euro moves came ahead of manufacturing surveys for the euro zone and the U.S., slated for later Monday.

The British pound GBPUSD +0.1002% fetched $1.5212, up from $1.5206.

Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.

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