Euro steady ahead of European Central Bank meeting

TOKYO: The euro held firm in Asia on Thursday ahead of a European Central Bank policy meeting later in the day and despite French officials' call for possible market intervention to curb the unit's rise.

In Tokyo afternoon trading, the single currency inched up to 126.59 yen from 126.46 yen and to $1.3526 from $1.3519 in New York on Wednesday.

The dollar was at 93.55 yen, flat from US trading, halting the Japanese currency's steep slide after it plunged to its lowest level in nearly three years against the greenback a day earlier.

The yen's sharp tumble followed Bank of Japan (BoJ) Governor Masaaki Shirakawa's announcement late on Tuesday that he planned to quit about three weeks before the end of his term.

His offer to resign intensifies the search for a successor who would take aggressive monetary policies promised by the new government led by Prime Minister Shinzo Abe, analysts said, after the BoJ and Tokyo butted heads on how to stoke the world's third-largest economy.

Despite the rise, "recent yen losses could feed back upon the yen creating further short-term pressure", Credit Agricole said in a note.

Market players were waiting for policy meetings by the ECB and Bank of England later Thursday.

"No change in policy is expected at both meetings," National Australia Bank said in a note.

"At ECB President (Mario) Draghi's press conference, we do not expect him to turn in a more dovish performance. Rather we expect him to once again outline the improvement in financial markets as euro area fragmentation risks fade and other indicators of risk improve," it added.

Earlier this week, French President Francois Hollande called for the eurozone to manage its exchange rate, a point echoed by his Finance Minister Pierre Moscovici who warned the euro's rise could hurt the bloc's recovery.

Berlin on Wednesday responded that the euro was "currently not overvalued".

The back and forth followed criticism levelled at Tokyo over its exchange-rate policy, with Japanese officials repeatedly denying accusations they were devaluing the yen in a move that risked a global currency war.

The dollar was mixed against other Asia-Pacific currencies, firming to Sg$1.2385 from Sg$1.2371 on Wednesday, to Tw$29.55 from Tw$29.49 and to 9,713 Indonesian rupiah from 9,687 rupiah.

The greenback also gained to 53.30 Indian rupees from 53.01 rupees while it slipped to 1,087.90 South Korean won from 1,088.68 won. It was nearly flat at 29.77 Thai baht and 40.65 Philippine pesos.

The Australian dollar slipped to $1.0329 from $1.0356, and China's yuan fetched 14.98 yen against 15.04 yen.