FOREX-Dollar up, but yuan sluggish as traders sceptical of China PMI bounce

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Tuesday is last trading of Japan's fiscal year
* Other investors close books at end of Jan-March quarter
* Traders look to economic data to measure virus impact

By Stanley White
TOKYO, March 31 (Reuters) - The dollar rose against the yen
on Tuesday as Japanese investors and companies rushed to cover a
shortage of the U.S. currency before their fiscal year end, but
sentiment remained fragile as the global coronavirus crisis
showed no signs of abating.
China's yuan was little changed even after a key survey
showed manufacturing returned to growth in March, as investors
remain sceptical of the uptick given many businesses are still
struggling resume full operations amid widespread disruptions
caused by the coronavirus.
The pound fell against the greenback and the euro as a
sovereign ratings downgrade continued to weigh on sterling,
underlining the strain on public finances from a much needed
massive fiscal stimulus.
Tuesday is the last trading data for Japan's fiscal year and
the end of the quarter for major investors elsewhere, which
could lead to some volatile swings as big players in the
currency market close their books.
However, analysts warn that an almost certain global
recession due to the coronavirus will remain a dominant
influence in trading and eventually favour currencies least
affected by the economic downturn.
"The talk is Japanese names are short of dollars, which is
likely to keep the dollar bid well into London time," said Yukio
Ishizuki, FX strategist at Daiwa Securities in Tokyo.
"We have to look beyond that and focus on what's going on in
China's economy. Even if there is some decent data from China, I
cannot be optimistic, because economic activity in many
countries is grinding to a halt."
The dollar rose 0.69% to 108.55 yen JPY=EBS on Tuesday in
Asia.
In the onshore market, the yuan CNY=CFXS held steady at
7.0977 against the dollar.
China's official manufacturing Purchasing Manager's Index
unexpectedly showed activity swung to expansion in March, but
traders tempered their optimism because China's economy is still
expected to suffer a steep economic contraction in the first
quarter and other major economies are also taking a big hit.
Only on Monday the People's Bank of China unexpectedly cut
its reverse repo rate by the most in almost five years to
relieve pressure on the economy. The euro EUR=EBS fell 0.24% to $1.1013. Traders are
bracing for data expected to show a rise in German unemployment
as the global economy reels from the coronavirus pandemic.
Against the Swiss franc CHF=EBS , the dollar edged up to
0.9610, following a 0.8% gain on Monday.
Sterling GBP=D3 fell 0.71% to $1.2331, and against the
euro EURGBP=D3 , the pound fell 0.5% to 89.34 pence.
The pound remained under the gun after ratings agency Fitch
cut Britain's sovereign debt rating on Friday, saying debt
levels would jump as it ramped up spending to offset a near
shutdown of the economy. Traders are also awaiting the release of UK gross domestic
product later on Tuesday.
The New Zealand dollar NZD=D3 dipped after the country's
government extended a nationwide state of emergency for another
seven days to slow the spread of the coronavirus, but the kiwi
quickly regained its composure to trade steady at $0.6029.
The Australian dollar AUD=D3 held its ground at $0.6174.
The antipodean currencies have come under heavy selling
pressure over recent weeks as their close economic ties to China
and the global commodities trade make them vulnerable to the
coronavirus outbreak.