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Japanese yen bounces back in Asia

TOKYO--The yen rebounded in Asian trade on Tuesday after suffering weeks of steep declines fuelled by promises from the country's new prime minister to push for more central bank easing.

The U.S dollar weakened to 87.48 yen from 87.89 yen in New York trade, where last week it hit a peak of 88.41 yen, its highest level since mid-July 2010.

The euro also lost ground to 114.83 yen from 115.09 yen, while the single currency bought US$1.3125 against US$1.3115 ahead of a closely watched European Central Bank (ECB) meeting later this week.

Japan's currency has been under heavy selling pressure since the nation's new leader Shinzo Abe vowed before his successful election last month to push the Bank of Japan (BOJ) for more aggressive monetary easing.

After taking office at the end of December, he repeated that pledge as he centers his first weeks in power on fixing Japan's long-suffering economy.

But Capital Economics said in a note that “we continue to wonder whether this story has much longer to run,” and described the BOJ's policies as “already extremely accommodative.”

Also Tuesday, Japan's new finance minister said Tokyo would buy bonds issued by Europe's permanent bailout fund to help soothe debt problems in the eurozone — a major Japanese export market — and stabilize the yen.

His comments briefly sent the euro and U.S dollar higher against the Japanese unit.

Reports quoting Japanese executives as saying that foreign investors could be scared off if the yen weakens too quickly also had an impact.

The U.S dollar was mixed against other Asia-Pacific units.

It fell to SG$1.2305 from SG$1.2310 on Monday, to 30.43 Thai baht from 30.46 baht, to 40.87 Philippine pesos from 40.92 pesos, and to 1,063.10 South Korean won from 1,063.76 won.

The greenback rose to 55.32 Indian rupees from 55.00 rupees, and to 9,832 Indonesian rupiah from 9,799 rupiah.

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