By Ian Chua
SYDNEY (Reuters) - The yen nursed broad losses early in Asia on Wednesday, having suffered a big reversal overnight as traders in London and New York took a brighter view on the global economy and dumped the safe-haven Japanese currency.
Helping to turn sentiment around was encouraging U.S. factory and construction data, which offered hope the economy was regaining momentum. U.S. stocks <.SPX> staged their biggest one-day rise in a month and closed at their highest since early January.
The euro rebounded towards 124.00 yen >, from a near three-year trough of 122.085, a punishing move for those who had bought the Japanese currency during the Asian session on Tuesday.
The greenback rose to its highest in nearly two weeks at 114.185 > on the back of a 1.2 percent rally. Enjoying gains of more than 1.5 percent, the Australian dollar powered towards 82.00 yen >, while its New Zealand peer popped back above 75.50 >.
"The risk-on sentiment has relegated the yen to the bottom of the leader board over the past 24 hours. The improvement in sentiment has also provided a lift to commodity prices and as a result commodity-related currencies have outperformed," analysts at National Australia Bank wrote in a note to clients.
Further diminishing the allure of the yen was talk of more stimulus from Japanese authorities, though this time the chatter centred on fiscal measures, rather than monetary policy action.
In Europe, the expectation is for further easing from the European Central Bank (ECB) at next week's review. ECB President Mario Draghi on Tuesday said the meeting would have to take into account weaker prospects for growth and inflation.
The common currency was little changed on the greenback at $1.0868 >, pinned near a one-month trough of $1.0834 set on Tuesday.
Business surveys outside the United States were more sober, with manufacturing output across much of Asia shrinking in February and waning throughout Europe.
Among the best performing major currencies was the Canadian dollar, which scaled a three-month peak of C$1.3550 per USD > after economic growth data beat forecasts.
The Aussie flirted with 72 U.S. cents >, having drifted up from Tuesday's low near 71 cents. Further gains will depend on local gross domestic product data due at 0030 GMT.
Analysts polled by Reuters expect economic growth to have slowed to 0.4 percent in the fourth quarter, from 0.9 percent, keeping the annual growth rate steady at a sub-par 2.5 percent.
(Editing by Richard Pullin)
