SINGAPORE: The euro held steady against the yen on Tuesday, having bounced from earlier lows after Japanese Finance Minister Taro Aso said Japan will buy bonds issued by the euro zone's ESM bailout fund.
The euro quickly jumped from around 114.60 yen to an intraday high of 115.25 yen after Aso said Japan will purchase ESM bonds to help stabilise Europe.
The euro last stood at 115.13 yen, steady from late US trade on Monday.
The dollar fell against the yen as investors booked profits in the wake of the greenback's rally to a 2-1/2 year high versus the Japanese currency last week.
The dollar shed 0.1 percent to 87.67 yen. It fell to as low as 87.23 yen earlier, pulling away from Friday's peak of 88.48 yen on trading platform EBS, the dollar's strongest level against the yen since July 2010.
Traders and analysts said the dollar had been due for a pullback against the yen.
The dollar had leapt nearly 12 percent in about two months, due to expectations that the new government elected in December would persuade the Bank of Japan to adopt a more forceful monetary stimulus approach.
"I think the market will now try to find what the dollar's range against the yen will be, for example whether we are in for a 83-88 range or 85-90," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation.
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