Yen higher after Jakarta blasts

LONDON: The safe-haven yen rose against the dollar and the euro on Friday as traders reacted nervously to reports of explosions ripping through two luxury hotels in Jakarta, analysts said.

In late morning trading here, the dollar fell to 93.69 yen from 93.89 yen late in New York on Thursday.

The European single currency dropped to 132.04 yen from 132.87 yen late on Thursday. The euro also retreated to 1.4099 dollars from 1.4150 dollars.

"Blasts at Jakarta hotels ... add a cautious tone to trading and are prompting unwinding of some risk positions," said Societe Generale currency strategist Patrick Bennett.

High-explosive bombs tore through two luxury hotels in Jakarta on Friday, killing at least nine people including foreigners as terrorism returned to the world's most populous Muslim nation.

Officials said at least 41 other people were injured when two breakfast-time blasts shook the Indonesian capital's Ritz-Carlton hotel and the nearby JW Marriott, leaving terrified people bloodied from flying glass and debris.

Investors were also digesting a soft report on US manufacturing activity published Thursday while awaiting more US earnings results and American housing data due Friday for fresh clues on the outlook for the world's largest economy.

The Philadelphia Federal Reserve's manufacturing index, seen as a barometer of nationwide trends, fell to minus 7.5 percent in July from minus 2.2 percent in June -- a worse outcome than markets had expected.

The negative figure dampened optimism that the US economy has bottomed out, said SMBC chief strategist Daisuke Uno.

"The data do not match many market participants' hopes for a recovery," he added.

Wall Street giants Bank of America and Citigroup will release their second-quarter earnings reports Friday along with General Electric.

JPMorgan Chase, the second-largest US bank by assets, had on Thursday said that its net profit jumped 36 percent in the second quarter, to 2.7 billion dollars.

But worries over the health of US lenders remained as major lender CIT, which serves hundreds of thousands of small to mid-sized businesses around the country, teetered on the verge of bankruptcy.

In London trading on Friday, the euro was changing hands at 1.4099 dollars against 1.4150 dollars late on Thursday, 132.04 yen (132.87), 0.8644 pounds (0.8607) and 1.5195 Swiss francs (1.5175).

The dollar stood at 93.69 yen (93.89) and 1.0780 Swiss francs (1.0724).

The pound was at 1.6311 dollars (1.6438).

On the London Bullion Market, the price of gold increased to 936.44 dollars an ounce from 935 dollars an ounce late on Thursday.