* Yen buoyed as investors take shelter
* Euro down after weak euro zone figures, ahead of ECB
* Aussie falls before expected hefty rate cut by RBA
* Kiwi hits 8-year low on yen after job market data
By Kaori Kaneko
TOKYO, Feb 2 (Reuters) - The yen rose against major
currencies on Monday after poor economic data in the United
States and the euro zone heightened investor concerns about a
prolonged economic recession.
Worries about the faltering global economy also weighed on
higher-yielding currencies such as the Australian dollar and the
New Zealand dollar, which hit its lowest in eight years against
the yen as investors remained risk averse.
The euro fell to its weakest in two months against the dollar
as worsening labour market data and receding inflation made some
reassess the outlook for interest rate cuts in the euro zone.
"Changing rate expectations is one factor behind the euro's
weakness," said Tomoko Fujii, head of Japan economics and
strategy at Bank of America.
"The data are all telling us that aggressive rate cuts are
probably needed in the next several months -- although not
necessarily this week."
Except against the yen, the dollar firmed, although investors
were cautious about pushing it higher as they awaited progress on
U.S. plans to clean up debt and recapitalise banks.
As early as this week, U.S. President Barack Obama and his
economic advisers may begin to flesh out such plans and could lay
out a range of options, including setting up a so-called "bad
bank" that would buy assets from banks and offering guarantees
that would cap losses at a certain threshold. []
"If a bad bank is set up, it would be fresh, positive news
and lift U.S. stocks. That would likely ease risk aversion to
some extent," said Yuichiro Nakamura, FX dealer at Shinkin
Central Bank.
The dollar was at 89.67 yen <JPY=>, slipping 0.3 percent from
late U.S. trade on Friday, when data showed the U.S. economy
shrank 3.8 percent in the fourth quarter, its fastest pace in
nearly 27 years. []
The euro fell 0.7 percent to $1.2728 <EUR=> after dipping as
low as $1.2710 on trading platform EBS, the lowest since early
December as anxiety about Europe's slumping economy weighed.
Against the Japanese currency, the euro declined 1 percent to
114.17 yen <EURJPY=R>.
The European Central Bank is expected to keep rates on hold
at 2 percent when it meets on Thursday but take action in March
as both growth and inflation slide to new lows, a Reuters poll
showed. []
AUSSIE, KIWI FALL
The Aussie fell to a two-month low as weak Australian housing
data reinforced expectations of a bold interest rate cut on
Tuesday.
Analysts expect the Reserve Bank of Australia to cut its key
cash rate by 100 basis points to 3.25 percent, the lowest since
the central bank began to target it in the early 1990s, a Reuters
poll showed. []
The Australian dollar fell 0.7 percent to $0.6327 <AUD=D4>,
after hitting $0.6305, its lowest since early December, according
to Reuters data.
The New Zealand dollar fell 1 percent to $0.5037 <NZD=D4>
after hitting $0.5017 <NZD=D4>, its latest six-year low, Reuters
data showed. It dropped 1.5 percent to 45.00 yen <NZDJPY=R>, its
weakest since November 2000.
New Zealand wage growth eased from record levels in the
fourth quarter, data showed on Monday, leaving the way open for
more interest rate cuts. []
(Additional reporting by Charlotte Cooper; Editing by Brent
Kininmont)
