TOKYO - The dollar rebounded against the yen in Asia Tuesday as markets eye key US economic data for signs of a recovery. The greenback bought 97.43 yen in afternoon Tokyo trade, strengthening from 96.90 yen in New York on Monday. The euro was stronger at $1.3302 and 129.62 yen, compared with $1.3299 and 128.84 yen in US trading. The US unit’s rise on the yen came as the Nikkei stock index soared 2.57pcby the close, with buoyant sentiment upping investors’ risk sentiment which supports the dollar.

Dollar-yen trading and the local stock market are closely intertwined as the value of the yen is closely linked to the profitability of Japanese exporters.

The dollar has been weak since mid-July, and that was reinforced by a disappointing US jobs report earlier this month which suggested the Federal Reserve might delay plans to scale back its huge bond-buying programme, known as quantitative easing.

Markets are keeping a close eye on a string of data this week, including retail sales data later Tuesday, for clues about the state of the world’s largest economy.

“If the results come out strong, we could see the dollar rising toward 98 yen,” Junichi Ishikawa, market analyst at IG Securities in Tokyo, told Dow Jones Newswires.

A pull back on the Fed programme—which largely depends on a recovery in the US economy—would mean fewer dollars in the financial system, boosting demand and the greenback’s value.

Currency markets also reacted to a report in the leading Nikkei business daily which said Japanese Prime Minister Shinzo Abe was reviewing a possible corporate tax rate cut in a bid to stoke growth and offset the impact of a national sales tax hike.

Tokyo is mulling lifting Japan’s consumption tax in a bid to bring down a debt pile that is the worst in the industrialised world at more than twice the size of the economy.

Weaker-than-expected GDP data for the second quarter on Monday had nervous investors speculating that Abe may hold off the tax rise.

Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan, said going ahead with the tax rise was a positive for the dollar-yen pair as it boosts investors’ appetite for risk. The yen is considered a safe-haven currency in times of uncertainty.

The dollar was higher against other Asia-Pacific currencies.

It firmed to 43.72 Philippine pesos from 43.66 pesos the previous day, to 1,116.45 South Korean won from 1,113.19 won, to Sg$1.2629 from Sg$1.2609 and to Tw$29.95 from Tw$29.94.

The greenback also strengthened to 61.42 Indian rupees from 60.73 rupees, to 31.23 Thai baht from 31.17 baht and to 10,308 Indonesian rupiah from 10,302 rupiah.

The Australian dollar slipped to 91.32 US cents from 91.76 cents.

The Chinese yuan fetched 15.92 yen from 15.79 yen.

Germany sees highest inflation rate of 2013

FRANKFURT (AFP) - The rate of inflation in Germany, Europe’s biggest economy, continued to climb in July to reach the highest level seen this year, final data showed on Tuesday.

The cost of living rose 1.9 per cent this month on a 12-month basis, up from 1.8 per cent in June, the federal statistics office Destatis said in a statement.

The pick-up in the rate of inflation was driven primarily by rising food prices, Destatis said.

Using the Harmonised Index of Consumer Prices (HICP), the European Central Bank’s inflation yardstick, the rate of inflation in Germany was also measured at 1.9 per cent in July.

The ECB defines price stability as increases in HICP of close to but just below 2.0 per cent.

S. Korea businessmen call for Kaesong deal

SEOUL (AFP) - South Korean businessmen called for the Koreas to strike a deal on the reopening of the Kaesong joint industrial zone, in a statement released on the eve of last-ditch talks.

The Kaesong complex, which houses 123 South Korean firms, has been closed since Pyongyang pulled its 53,000-strong workforce out in April as military tensions soared on the divided peninsula.

Six rounds of talks on resuming operations made no progress and a seventh round on Wednesday is being touted as a last-chance effort.

“This time, our government and the North’s authorities must reach agreement on reopening Kaesong without fail,” an association representing the owners of the South Korean companies in Kaesong said in a statement.

The owners have repeatedly complained that their livelihoods are being held hostage to the intransigence of both sides in the dispute.

Built in 2004 as a rare symbol of inter-Korean cooperation, Kaesong had survived previous cross-border political swings, but became the most high-profile victim of the tensions that followed Pyongyang’s nuclear test in February.

Discussions on reopening the park, which lies 10 kilometers (six miles) inside the North Korean border, appeared to have petered out.

Then last week, just as Seoul announced it was going to start compensation payouts totalling $250 million to businesses impacted by Kaesong’s closure, North Korea proposed a fresh dialogue

But the proposal stopped short of Seoul’s demand for a binding guarantee that the North would not close the complex again—an issue that is likely to dominate Wednesday’s meeting.