The Chinese Yen/FILE
TOKYO, October 10- The yen picked up strength in Asia on Friday as dealers sought out safer bets after poor German data and an IMF warning of possible eurozone recession exacerbated concerns about the global economy.
The dollar, which touched a six year high above 110 yen last week, slipped to 107.79 yen from 107.84 yen in New York.
The euro fetched 136.86 yen against 136.87 yen in US trade and well down from the 137.70 yen earlier Thursday in Tokyo.
The single currency was up slightly at $1.2697 against $1.2691.
Gloomy sentiment also took a bite out of the Australian dollar, which weakened to 87.74 US cents from 88.80 cents the previous day.
Data on Thursday showed German exports slumped 5.8 percent, while four leading think tanks slashed their growth forecasts for the eurozone’s largest economy.
Also, International Monetary Fund chief Christine Lagarde said there was a growing chance of the eurozone slipping back into recession if action is not taken to prevent it.
Fears about the downbeat forecasts and IMF warning sparked a rally in the yen, which is considered a safe bet in times of turmoil.
“We are now in a crucial level,” says Osao Iizuka, head of trading at Sumitomo Mitsui Trust Bank.
“If the dollar yen rate doesn’t break below well established downside support of 107.50, it would be good to conclude the (dollar yen) adjustment is over.”
In recent weeks the dollar has hit multi year highs against the yen and euro as strong US data fanned expectations of a rate hike sooner than later.
However, it eased at the start of the week and on Wednesday it tumbled further after minutes from the Federal Reserve’s September meeting indicated policymakers could hold off hiking rates before its mid 2015 timetable.
But Taisuke Tanaka at Deutsche Bank in Tokyo said the dollar may win support from buying by Japanese pension funds and other institutional investors, as well as importers who missed out on its recent rally.
“The more the dollar-yen falls from 108 toward the 105 level, the more their spree of dip-buying will intensify,” he told Dow Jones Newswires.
The dollar was mostly higher against other Asia Pacific currencies.
It rose to Sg$1.2701 from Sg$1.2693 on Thursday, 1,069.78 South Korean won from 1,067.38 won and to 12,206.00 Indonesian rupiah from 12,182.50 rupiah.
It also strengthened to 61.12 Indian rupees from 61.08 rupees, to 44.72 Philippine pesos from 44.61 pesos and to Tw$30.37 from Tw$30.36, but it weakened to 32.40 Thai baht from 32.44 baht.
The Chinese yuan bought 17.58 yen against 17.59 yen.
