Euro firms on buybacks before G7 meeting

TOKYO: The euro rebounded against the dollar in Asia on Friday on buybacks following heavy selloffs overnight as dealers braced for a weekend meeting of the Group of Seven rich industrialised countries.

The euro rose to $1.3926 in Tokyo trade from $1.3880 in New York late Thursday. The European currency also firmed to 107.92 yen from 107.57 yen. The dollar was flat at 77.50 yen against 77.52 yen.

"Market participants were adjusting their positions ahead of the weekend meeting of the G7," said Gen Kawabe, senior dealer at Chuo Mitsui Trust and Banking.

Finance ministers and central bankers from the G7 will kick off a meeting on Friday in the French port city of Marseille, aiming to revive global growth and ease the European debt crisis.

Japanese Finance Minister Jun Azumi reiterated concerns over the strong yen, which has been dealing a blow to Japanese exporters.

"I will tell (G7 partners) that we will closely monitor speculative movement and, in case it becomes excessive, we will take decisive steps," he told reporters in Marseille.

US President Barack Obama Thursday told Republicans to halt a "political circus" and immediately pass a $447 billion jobs plan, including $175 billion to cut employee payroll taxes in half, to jolt the stalled economy.

Obama's proposals look great, but "the problem is whether these measures are going to be implemented," Daisuke Karakama, market economist at Mizuho Corporate Bank, told Dow Jones Newswires.

The market is watching "how the opposition (Republican) party will react to them" and if the measures are stuck in Congress, economic indicators may further deteriorate, Karakama said.

Currency rates hardly moved after Japan revised down its April-June gross domestic product to an annualised contraction of 2.1 percent from the preliminary reading of a 1.3 percent shrinkage, matching market expectations.

The euro took a hit Thursday after the European Central Bank signalled it would stop hiking interest rates, citing increased risks to the eurozone economy, and cut its growth forecasts.

Copyright AFP (Agence France-Presse), 2011