TOKYO - The dollar declined against most Asian currencies Tuesday as a little confidence returned to regional trading floors on the back of a rebound in oil prices.
Emerging currencies recovered some of their losses from the previous day, with the Indonesian rupiah, Malaysia's ringgit and the South Korean won higher.
On Monday, the units received a battering after a weak round of manufacturing data out of China and a disappointing factory reading in the US fuelled a sell-off in global financial markets.
The severing of diplomatic relations between old Gulf foes Saudi Arabia and Iran, over Riyadh's execution of a Shiite cleric, added to fears.
On Tuesday, analysts warned against more volatility on the back of a weak outlook for global growth.
"Investors need to be more cautious," Matthew Sherwood, Sydney-based head of investment strategy at Perpetual Ltd, told Bloomberg News.
"Growth remains a concern. How the year plays out is unclear, but the only surety is that volatility will increase." The greenback ticked up to 119.45 yen (S$1.50) from 119.42 yen Monday in New York, after dipping below 119 yen for the first time since October in US trade.
The euro fell to US$1.0824 (S$1.50) from US$1.0833. It also dipped to 129.28 yen from 129.37 yen and is sharply down from 131.59 yen at the end of last year.
However, crude prices bounced on Tuesday in Asia as analysts said a global crude supply glut and the weaker outlook for China's huge economy were keeping any increases in check.
"Oil prices have risen, but not materially," research house Capital Economics said.
"Indeed, ample global stocks of crude and higher production elsewhere mean that geopolitical risks from the Middle East are not as great as they once were," it said in a market commentary.
The South Korean won rose 0.03 per cent against the dollar, while the Indonesian rupiah gained 0.88 per cent.
Malaysia's ringgit tacked on 0.15 per cent, the Thai baht was up 0.03 per cent and the Singapore dollar advanced 0.01 per cent.
However, Taiwan's dollar declined 0.08 per cent.