* Yen touches 6-year low vs New Zealand dollar
* Hopes of China stimulus keeping risk demand buoyant
* Euro seen subdued ahead of euro zone inflation data
* China PMI on Tuesday also in focus
(Updates prices, adds comments)
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, March 31 The yen struggled to
gain traction versus the dollar and touched a fresh six-year low
against the New Zealand dollar on Monday as demand for the
safe-haven currency waned amid hopes of more stimulus from
The dollar held steady at 102.84 yen, staying above
Friday's session low near 102.03 yen.
The New Zealand dollar rose as far as 89.26 yen
earlier on Monday, a level not seen since November 2007.
Traders said China's official manufacturing PMI survey due
on Tuesday will be closely watched after a recent string of
disappointing data pointed to a slowdown in the world's second
"We expect a decline to 49.8 in March from 50.2 in February,
falling below 50 for the first time in 17 months, as growth
momentum continues to fade. This should further heighten the
urgency to ease policy," analysts at Nomura wrote in a note to
Investors will also be keeping a close eye on euro zone
inflation figures due later on Monday after data late last week
showed a key measure of German inflation unexpectedly slowed in
The soft reading raises the downside risk for euro zone
inflation, which is set to stay in what European Central Bank
(ECB) President Mario Draghi has called the "danger zone" of
below 1 percent for a sixth month.
Yet, Bundesbank President Jens Weidmann on Saturday said the
ECB should not over-react to the slowdown in inflation as it was
caused largely by temporary cyclical factors.
In any case, traders said a weak number will no doubt put
the ECB under more pressure to act and that would be negative
for the euro.
The euro held steady at $1.3749, having plumbed a
one-month low near $1.3705 on Friday. Against the yen, the euro
eased 0.1 percent to around 141.33 yen.
The euro, which set a two-year high of $1.3967 earlier in
March, was on track to end the January-March quarter little
changed compared to levels seen at the end of December.
"The euro has, for us, been a frustrating trade... We, like
most others, are bearish euro over the medium-term," said Sim
Moh Siong, FX strategist for Bank of Singapore.
The euro, however, has been supported by the euro zone's
current account surplus and the reluctance of the ECB to ease
monetary policy further, Sim said.
Later on Monday, investors will also be watching comments by
U.S. Federal Reserve Chair Janet Yellen for any fresh hints on
the monetary policy outlook.
The dollar had gained a lift earlier this month after Yellen
said the Fed could raise interest rates six months after its
bond-buying stimulus ends, remarks that were seen as suggesting
the possibility of a rate hike as early as spring 2015.
Commodity currencies, which have been riding high on
expectations of more stimulus from China, took a breather
against the dollar following their recent rally.
The Australian dollar slipped 0.3 percent to $0.9221
, down from a four-month high of $0.9296 set on Friday.
The New Zealand dollar held steady at $0.8649,
after touching a peak of $0.8698 on Friday, its strongest level
in 2-1/2 years.
(Editing by Kim Coghill)