TOKYO: The yen rose in Asia on Wednesday as plunging oil prices sent jittery investors into safer assets, while the euro was hit expectations of more stimulus from the European Central Bank (ECB).
In Tokyo, the dollar slipped to 117.50 yen, from 117.90 yen in New York and well down from levels above 118 yen in Asia earlier Tuesday.
The euro weakened to 138.31 yen and $1.1770 from 138.84 yen and $1.1777 in US trade, after comments from a key member of the ECB were taken as an indication new stimulus measures could come soon.
"If stocks continue to slump on the idea that low oil prices will become a risk to the US or the global economy, (the) dollar-yen will continue to fall," Masato Yanagiya, head of foreign exchange and money trading at Sumitomo Mitsui Banking Corp. in New York, told Bloomberg News.
"It'll be easy for the yen to strengthen amid a flight to quality."
Investors consider the yen as a safe-haven currency during times of uncertainty or turmoil.
Equity markets have been shaken by plunging oil prices with US benchmark West Texas Intermediate for February falling 18 cents to $45.71 on Wednesday, a level not seen since March 2009, while Brent slipped 25 cents to $46.34, its lowest since April 2009.
Both contracts were hammered Tuesday after two members of OPEC said the cartel could not prevent prices from plunging further, despite losing more than 50 percent since June.
The euro took a hit Tuesday after Ewald Nowotny, a governor of the Austrian central bank and a member of the ECB's governing council, highlighted the need for policymakers to tackle the threat of deflation in the eurozone.
"It is important that one takes deflation risks seriously and addresses them," Nowotny said, according to Bloomberg News, adding that the bank was weighing several stimulus measures.
"We shouldn't wait too long with a reaction."
Analysts said the remarks were a sign the ECB may act when it meets on January 22, in part because Nowotny is not known for being particularly interventionist.
"There are expectations for sovereign quantitative easing by the ECB," said Sumitomo Mitsui's Yanagiya.
"Once the details of the stimulus become clear, the euro should drop into a $1.10-$1.15 range."
In other trading, the ruble took a breather after plunging by around five percent on Tuesday as falling oil prices exacerbated worries about Russia's energy-export dependent economy.
The dollar was at 65.18 rubles, down from levels above 66 rubles on Tuesday.
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