Thursday, 12 July 2012 10:13
TOKYO: The euro was down against other major currencies in Asia Thursday while the dollar lost ground on the yen as markets lean toward the view that Japan's central bank will hold off further easing.
The common currency bought $1.2232 and 97.28 yen in Tokyo morning trade, from $1.2238 and 97.58 yen in New York late Wednesday.
The euro at one stage on Wednesday tumbled to a two-year low of $1.2210 shortly after minutes from a US Federal Reserve meeting suggested the central bank was split on whether to usher in further stimulus measures.
Several policymakers at the Fed urged the central bank to look at new tools to bolster the financial system amid a weak recovery, but the minutes also showed the Fed was split on how, when and if to provide more stimulus.
Kymberly Martin, a BNZ currency strategist in New Zealand, said euro/dollar trade "will just carry on with the general mood overnight with perhaps a little less expectation of quantitative easing from the Fed".
Cautious optimism about an austerity package for Spain was largely offset by worries that Italy may have to tap a eurozone rescue fund, dealers said.
The dollar weakened to 79.50 yen in Asian trade from 79.74 yen in New York as investors focus on the outcome of a two-day Bank of Japan policy meeting.
Speculation that Japan's central bank would usher in further easing measures -- a move that would generally spark yen selling -- have eased, dealers said.
"I think about half, or two-thirds of market participants don't expect any new easing measures to be announced," a senior trader at a major Japanese trust bank told Dow Jones Newswires.
But if the BoJ surprises markets and takes new policy action, "the US dollar against the yen could climb above the 80.50-80.60 level", the trader added.
Copyright AFP (Agence France-Presse), 2012