TOKYO: The euro edged upward but faced persistent selling pressure in Asia Friday after tumbling on intensifying tensions over European sovereign debts.
The euro fetched $1.2794 in Tokyo morning trade, compared with $1.2789 in New York late Thursday after sinking as low as $1.2771 -- its lowest point since September 2010.
The euro was at 98.74 yen, slightly up from 98.67 yen in New York, where it fell to an 11-year low of 98.48 yen.
The dollar was at 77.17 yen, unchanged from New York.
The euro will likely face resistance at $1.2850 even if short-covering kicks in after Thursday's tumble, Osao Iizuka, head of FX trading at Sumitomo Trust and Banking, said.
"The upside will be heavy and any rebound should be limited," he told Dow Jones Newswires, adding activity would be limited during Asian trading hours ahead of the US December jobs report due later in the day.
A senior dealer at a Japanese bank expected euro-selling demand to persist on the back of growing pressure on European banks to reduce their sovereign debt holdings.
Dealers said sentiment was hit badly Thursday after Spain's economy minister warned that the country's banks could need 50 billion euros to cover bad loan losses.
A surprise visit by Italian Prime Minister Mario Monti to Brussels also stoked fresh uncertainty, although diplomatic sources in Belgium said his trip was completely private.
US data released from a private payrolls firm, including figures on private sector job creation last month, appeared to confirm the strengthening of the economy -- and boosted the dollar.
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