Dollar, Yen Fall as Asian Recovery Signs Cut Demand for Refuge

April 1 (Bloomberg) -- The dollar and yen fell versus the euro as signs Asian economies are picking up damped demand for the Japanese and U.S. currencies as refuges.

The dollar dropped against 12 of its 16 major counterparts before a report today forecast to show China’s manufacturing accelerated in March and after data showed confidence improved among Japan’s industrial companies. New Zealand’s dollar fell for the first day in six after the International Monetary Fund said the currency was overvalued and may decline as the nation’s interest-rate advantage over the U.S. narrows.

“The rebound in Japan is doing OK and the overall recovery in Asia is benefiting from China and India,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd. “There’s a bias for the dollar and the yen to weaken.”

The dollar fell to $1.3550 per euro as of 9:38 a.m. in Tokyo from $1.3510 in New York yesterday. The yen dropped to 126.57 per euro from 126.27. Earlier, it touched 126.63, the weakest level since Feb. 3. The dollar fetched 93.40 yen from 93.47 yen. It touched 93.64, the strongest since Jan. 8.

The so-called kiwi fell 0.2 percent to 70.94 U.S. cents. It dropped 0.2 percent to 66.26 yen.

China’s Purchasing Managers’ Index rose to 55 in March from 52 in February, according to the median estimate of economists in a Bloomberg survey.

The Bank of Japan’s Tankan survey showed confidence among Japanese large manufacturers was minus 14 in the three months ended in March, up from minus 24 in the prior quarter, matching the median forecast of 23 economists in a Bloomberg survey. A negative number means pessimists outnumber optimists.