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TOKYO (XFN-ASIA) - Industrial output fell a seasonally adjusted 0.2 pct in February from the previous month after having dropped by 1.7 pct in January, preliminary data from the Ministry of Economy, Trade and Industry showed.

The decline in output was smaller than the market’s consensus forecast of a 0.6 pct fall. The ministry had earlier projected a month-on-month decline of 1.8 pct for February.

Year-on-year, February output increased 2.6 pct .

The ministry also predicted that production in March will rise 1.5 pct from February and expand by a further 1.3 pct in April from March.

The ministry provided the following month-on-month data for February, compared with the corresponding revised figures for January:

Output - down 0.2 pct vs down 1.7 pct

Shipments - down 1.4 pct vs down 0.2 pct

Inventories - down 0.4 pct vs down 1.0 pct

(1 usd = 118.11 yen)

kaori.kaneko@xfn.com

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SYDNEY (XFN-ASIA) - The US dollar was higher against the yen here and softer against the euro with trading largely confined to a narrow range given a holiday in Japan today and with China out over the remainder of the week, dealers said.

At 1.43 pm Sydney (0343 GMT), the dollar was at 119.52 yen from 119.37 in Sydney morning trade while the euro was at 1.3645 usd from 1.3627 earlier.

CMC Markets’ chief analyst Ashraf Laidi noted the only short term obstacle for the euro is an unexpected defeat by French presidential candidate Nicolas Sarkozy , the preferred choice of financial markets.

“Eurozone officials may start to express words of concerns in the event that euro appreciation picks up the pace (1.3750 usd before end of next week), but the markets’ increased acceptance of the odds of a Federal Reserve easing by the fourth quarter as well as central banks’ continued euro buying on the periodic dips will further cement the currency’s climb,” Laidi said.

Meanwhile, the analyst said that although Friday’s US gross domestic product (GDP) data for the March quarter did not contain the trade figures, the extent of the growth slowdown highlights the contrasts between US and euro zone growth and monetary policy.

US GDP for the March quarter rose at an annual rate of just 1.3 pct, the slowest pace in four years and followed the 2.5 pct year-on-year growth to the December quarter.

“Our calls for a June Fed interest rate cut remain cemented by the protracted slowdown in housing, as well as the continued decline in sectoral employment payrolls as seen in the three-month moving averages in services, manufacturing, construction and retail,” Laidi said.

Sydney 1.43 pm (0343 GMT) vs Sydney 10.00 am (0000 GMT)

US dollar

119.52 yen vs 119.37 yen

1.2045 sfr vs 1.2065 sfr

Euro

1.3645 usd vs 1.3627 usd

163.02 yen vs 162.59 yen

1.6438 sfr vs 1.6437 sfr

0.6836 stg vs 0.6837 stg

Sterling

1.9964 usd vs 1.9933 usd

238.56 yen vs 238.02 yen

2.4039 sfr vs 2.4052 sfr

Australian dollar

0.8282 usd vs 0.8271 usd

0.4149 stg vs 0.4150 stg

98.965 yen vs 98.750 yen

New Zealand dollar

0.7390 usd vs 0.7383 usd

paul.daniel@xfn.com

BEIJING (XFN-ASIA) - The central bank has set the yuan central parity rate at a record of 7.7055 to the dollar, according to the China Foreign Exchange Trading System.

The rate, published on the official Chinamoney website (www.chinamoney.com.cn), compares with the midpoint of 7.7139 set the previous trading day.

The People’s Bank of China (PBoC) started setting a daily central parity rate on Jan 4, 2006.

On July 21, 2005, China freed the yuan from its long-standing peg to the dollar in favor of a trade-weighted basket of currencies, and allowed the local unit to appreciate by 2.1 pct.

The PBoC allows a trading band of 0.3 pct on either side of the central parity rate.

zachary.wei@xfn.com

LONDON (Thomson Financial) - Bank of England governor Mervyn King today reiterated that he expects the CPI annual rate to fall back sharply over the next 4-6 months.

He was appearing before the Treasury Select Committee.

At last count, in March, the CPI annual rate hit an all time high of 3.1 pct, triggering the unprecedented move requiring BoE governor Mervyn King to write a letter of explanation to the Chancellor of the Exchequer Gordon Brown.

King then said the MPC will look beyond short term gyrations in the target CPI annual rate and that the measure will likely ease back over the coming months.

sivakumar.sithraputhran@thomson.com

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BEIJING (XFN-ASIA) - The central bank has set the yuan central parity rate at 7.7453 to the dollar, according to the China Foreign Exchange Trading System.

The rate, published on the official Chinamoney website (www.chinamoney.com.cn), compares with the midpoint of 7.7472 set in the previous trading day.

The People’s Bank of China (PBoC) started setting a daily central parity rate on Jan 4, 2006.

On July 21, 2005, China freed the yuan from its long-standing peg to the dollar in favor of a trade-weighted basket of currencies, and allowed the local unit to appreciate by 2.1 pct.

The PBoC allows a trading band of 0.3 pct on either side of the central parity rate.

zachary.wei@xfn.com

For more information and to contact AFX: www.afxnews.com and www.afxpress.com