The greenback rallied against the Japanese yen to a more than three-week high at 99.37 on Tuesday and it is the biggest quarterly gain since 2001 on the back of rise in the global stock markets and after Japan’s Prime Minister Taro Aso said Japan, the world’s second-largest economy, is still staging at crisis.

A day earlier the Japanese yen rose against the dollar due to the fiscal year end but the

weak economic data (Japan unemployment rate was at 4.4% in February and housing start shrink by 24.9% on y/y) is holding investors from buying yen. Eur/jpy jumped from 128.27 to 131.87 on speculation that European assets would remain their yield advantage over those in Japan. Gpb/jpy also rallied fm 138.60 to as high as 142.52.

The dollar declined against European currencies due to gain in stocks (DJI ended the day up 86.90 or 1.16%) led to tentative return of risk appetite, reducing demand for safety. The single currency rose from 1.3175 to 1.3343 before retreat on profit-taking as investors awaited the ECB’s rate decision on Thursday, and the ECB is widely expected to cut rate to 1.00% and possibly further rate cut is needed. The British pound also went up from 1.4240 to 1.4377 before easing in late New York session.

Economic data to be released on Wednesday include Japan Tankan big manufacturing and Tankan capex, German retail sales, Swiss PMI, PMI manufacturing of Germany, eurozone, and U.K, eurozone unemployment rate is likely to increase to 8.3%. U.S. ADP employment data is due out at 12:15GMT (with economists expect it would be –660K from –697K) while U.S. ISM manufacturing is forecast to go up to 36.0 from 35.8.