HONG KONG: The yen steadied after taking a sharp fall immediately after Friday's enormous Japanese earthquake, while the euro rebounded against the dollar having plunged after a Spanish ratings downgrade. The yen fell to 83.30 to the dollar as dealers rushed away from the earthquake risk, but recovered in the late afternoon to 82.89 to the greenback, compared with 82.91 in New York late on Thursday. The euro fetched $1.3807, compared with $1.3794 in New York late Thursday. The single European unit gained to 114.47 yen from 114.31. The yen suffered an immediate sell-off as did Japanese shares in the minutes immediately after Japan's earthquake, which was measured at 8.9 by US geologists, caused extensive damage and unleashed a tsunami warning across a swathe of the Pacific. Other countries thought to be at risk also suffered currency sell-offs, including Taiwan and Indonesia.
"Right now, the markets are in a knee-jerk reaction," Dow Jones Newswires quoted a trader at a Singapore bank as saying, noting that the yen might be stabilising while traders awaited a proper assessment of the quake damage. The euro rebounded after investors flocked to the safe-haven dollar on Thursday, when Spain was hit by a ratings downgrade, violence surged in Libya, and China reported a rare trade deficit for February. Moody's said it had downgraded Spanish debt by a notch from Aa1 to Aa2 with a negative outlook, citing uncertainty over the country's ability to improve its finances. The news was an additional blow to the euro, amid lingering eurozone debt worries following Moody's downgrade of Greece this week. The dollar was stronger against most other Asian currencies. The unit rose to Sg$1.2737 from 1.2708 on Thursday, to 1,126.6 Korean won from 1,121.10, and to Tw$29.57 from 29.46. It also climbed to 8,790.00 Indonesian rupiah from 8,777.50, to 30.42 Thai baht from 30.30 and to 43.51 Philippine pesos from 43.62.
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