TOKYO: The euro weakened in Asia on Thursday after Standard & Poor's cut Spain's sovereign debt rating, while traders also had an eye on a meeting of the Group of Seven major economies in Tokyo.
The European common currency was changing hands at $1.2864 in Tokyo afternoon trade against $1.2887 in New York late Wednesday, while it fell to 100.36 yen from 100.74 yen.
The dollar was at 78.02 yen against 78.18 yen after falling below 78.00 yen briefly.
Standard & Poor's slashed Spain's rating late Wednesday by two notches to just above junk level, citing a deepening recession and strains from the country's troubled banks.
"The news caught the market off guard as we were focused on possible rating action by Moody's," Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust Bank, told Dow Jones Newswires.
A senior dealer at a Japanese bank said: "The focus is on whether London players will react to the S&P news again when they come to the market later in the day."
Also in Tokyo, finance ministers and central bankers from the G7 are to hold talks on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in Tokyo.
They are expected to discuss the plodding global economy as well as the yen's ongoing strength, which is hammering Japan's economy.
Speculators may move to dump dollars on expectations that Japan will not be able to intervene during the G7 meeting while caution would grow in the 77-yen range, said Yuji Saito, director of foreign exchange at Credit Agricole Bank.
The dollar was mixed against other Asia-Pacific currencies. It rose to 53.12 Indian rupees from 52.88 rupees on Wednesday and to 9,627 Indonesian rupiah from 9,610 rupiah.
It also firmed to 41.58 Philippine pesos from 41.54 pesos, to 30.74 Thai baht from 30.72 baht and to 1,115.15 South Korean won from 1,114.15 won, while edging down to Sg$1.2293 from Sg$1.2300 and to Tw$29.29 from Tw$29.32.
The Australian dollar rose to $1.0277 from $1.0224 a day earlier, while China's yuan changed hands at 12.39 yen against 12.40 yen.
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