* Yen gains broadly as Beijing's property curbs spook China
* Euro dips vs dlr, not far from Friday's 2-1/2 month low
* Single currency hampered by weak euro zone data
* Yen reaction to BOJ Gov nominee Kuroda comments limited so
By Masayuki Kitano
SINGAPORE, March 4 The yen rose broadly as a
sharp fall in Chinese equities on Beijing's decision to hit the
mainland property sector with strong curbs prompted investors to
buy the safe-haven Japanese currency, traders said.
China's Shanghai Composite index tumbled 2.9 percent
after Beijing announced more property market tightening measures
on Friday in a bid to contain housing costs.
The dollar fell 0.4 percent to 93.32 yen. The yen
also rose on the crosses, with the Australian dollar sliding 0.7
percent to 94.76 yen.
Last week's China manufacturing data "were worse than
expected and the latest move on the property sector deepens
uncertainty about how funds would flow within the Chinese
economy," said Chiyuki Shiraiwa, economist at SMBC Nikko
Investors generally seek shelter in the safe-haven Japanese
currency during times of market uncertainty or risk aversion.
The yen showed limited reaction to comments from Haruhiko
Kuroda, the Japanese government's nominee as the next Bank of
Huge purchases of longer-dated Japanese government bonds is
a natural way to ease monetary policy, but central bankers must
monitor the side-effects, Kuroda said on Monday during a
confirmation hearing in parliament.
Kuroda's remarks contained few surprises, said a trader for
a Japanese bank in Bangkok.
"The comments that have come out today are in line with
expectations and have not triggered renewed selling of the yen.
They didn't contain any big disappointments either," the trader
Kuroda, president of the Asian Development Bank and an
advocate of aggressive monetary easing, would replace incumbent
Masaaki Shirakawa, who is due to leave office on March 19.
Parliament is expected to approve Kuroda's nomination and
market players are expecting the Bank of Japan to unveil fresh
monetary easing steps in April, either at a policy meeting on
April 3-4, or the following one on April 26.
EURO REMAINS UNDER PRESSURE
The euro hovered near a 2-1/2 month low while the dollar
stayed close to a six-month high versus a basket of currencies
as signs of improvement in the U.S. economy stood in stark
contrast to a series of weak euro zone data.
Broad U.S. spending cuts that automatically kicked in on
Friday and threatens to dampen economic growth did little to
curb the dollar, which was supported by data released on Friday
that showed a pick-up in U.S. manufacturing activity.
Data out of the euro zone painted a bleak picture, with
business surveys released on Friday showing that European
manufacturing appeared no closer to recovery in February, while
official data showed that unemployment in the currency union hit
a new high of 11.9 percent in January.
"The U.S. is not looking particularly good, but in
comparison (to the euro zone) it's looking somewhat better,"
said Rob Ryan, strategist for RBS in Singapore.
The euro slipped 0.1 percent to about $1.3017, not
very far from Friday's low of $1.2966 set on trading platform
EBS, the single currency's lowest level since Dec. 11 and its
weakest in more than 2-1/2 months.
The dollar index, which measures the greenback's value
against a basket of major currencies, stood at 82.285,
having hit a high of 82.509 on Friday, its strongest level in
more than six months.
"A recent characteristic of the euro is that it seems to be
increasingly traded on the back of fundamental economic data
such as the unemployment rate, production, and GDP figures,"
said Daisuke Karakama, market economist for Mizuho Corporate
Bank in Tokyo.
The single currency has retreated over the past month since
hitting a high of $1.3711 on Feb. 1, and has come under added
pressure after an inconclusive election in Italy in late
February raised the risk of prolonged political instability in
the euro zone's third biggest economy.
The single currency now looks vulnerable on the daily
Ichimoku chart, a popular technical analysis tool. The euro fell
below the bottom of the daily Ichimoku cloud at $1.3085 and
closed below that level on Friday, in a bearish technical