TOKYO: The euro continued its downward slide in Asian trade on Wednesday afternoon as fears over Europe resurfaced after Spanish borrowing rates shot up close to danger levels.
The single unit bought $1.2467 and 99.05 yen, down from $1.2503 and 99.39 yen in New York Tuesday, and hovering near two-year lows against the dollar.
"We may see the pair bounce back slightly after overnight falls, but conditions are not right for continued buying of the single currency as there are plenty of euro-negative factors," said Kengo Suzuki, currency strategist at Mizuho Securities.
Spanish banks are at the heart of the renewed crisis, with Madrid forced to step in and save distressed lender Bankia from bad mortgage bets.
That has only added to the weight of debt the Spanish state must bear.
Investors will be paying close attention to remarks by European Central Bank President Mario Draghi later in the day, with the Wall Street Journal reporting that the ECB would oppose a Bankia bailout.
"We will look for whether he hints at the possibility of the ECB taking further liquidity provision or easing actions," added Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo.
"It's unlikely he will, so the euro is set to fall further," he told Dow Jones Newswires.
Meanwhile, the dollar was little changed at 79.44 yen in afternoon trade.
Dealers are taking a wait-and-see stance on dollar-yen trade ahead of key US economic data later this week, including the jobs report for May on Friday, analysts said.
Barclays chief currency strategist Masafumi Yamamoto said the dollar could be supported if the New York Federal Reserve Bank's president William Dudley later in the day makes negative remarks about the need for additional easing.
The dollar was mixed against other Asian currencies.
The greenback weakened to 1,177.40 South Korean won from 1,178.65 won on Tuesday
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