* Dollar down vs yen, Swiss franc and euro
* Market remains nervous of U.S. coronavirus outbreak
By Hideyuki Sano
TOKYO, March 11 (Reuters) - The dollar resumed its descent
against the safe-haven Japanese yen and the Swiss franc on
Wednesday as investors worried over how much governments and
central banks can do to limit the economic damage from the
coronavirus epidemic.
The moves mirrored falls in U.S. equity futures and U.S.
bond yields in Asian trade on Wednesday, as the spread of the
virus in major economies threatens to brake business activity
and curb consumer spending.
The dollar lost 0.8% to 104.67 yen JPY= , down more than a
full yen from Tuesday's high of 105.915.
The dollar had fallen to as low as 101.18 on Monday. While
Japan may already be in recession, its currency normally rises
at times of major financial market stress because of the
country's current account surplus and its net creditor status.
The Swiss franc gained 0.45% to 0.9358 franc per dollar
CHF= while the euro also rose 0.5% to $1.1336 EUR= .
The dollar had jumped on Tuesday as investors hoped global
monetary policymakers will launch further stimulus plans aimed
at bolstering economies hit by trade and travel disruptions.
But a lack of clarity on what Washington will do has kept
many investors on guard.
U.S. President Donald Trump said on Tuesday he will ask
Congress for a payroll tax cut and other "very major" stimulus
moves, but the details remain unclear. "It is too early to say the market sentiment has turned
positive. Yesterday's rebound in the dollar and in risk assets
is a type of a rebound you often see in a downtrend," said
Shinji Ishimaru, senior currency analyst at MUFG Bank.
"In addition to economic measures, the focus will be on how
much the U.S. can contain the infections to keep the economy
going. That is a very big unknown," he said.
The U.S. Centers for Disease Control and Prevention (CDC)
reported on Tuesday 696 new cases of coronavirus, an increase of
224 from its previous count, and said the number of deaths had
risen by six to 25. Investors are also expecting the U.S. Federal Reserve to cut
interest rates by at least 0.5 percentage point at its policy
review next week, in addition to its emergency rate reduction
earlier this month.
It is not clear if such a move could boost investors' risk
tolerance after global equities had tumbled following the Fed's
surprise rate cut just over a week ago, market players said.
But that will surely diminish the dollar's yield advantage
over other major currencies, which has been a main driver of the
dollar's strength in the past few years.
Financial markets are also betting the European Central Bank
will cut its interest rates by 0.10 percentage on Thursday.
Still with interest rates at minus 0.50%, many investors think
the ECB has limited room for additional cuts.