SINGAPORE: The euro eased but still held near a two-week high versus the dollar on Friday, finding support after the European Central Bank said the previous day that it was ready to buy bonds of troubled euro zone members.
The yen edged higher after the Bank of Japan kept monetary policy unchanged and held off from additional easing measures.
The initial reaction was limited, however, as Friday's decision was in line with expectations.
The euro traded at $1.3014, down 0.1 percent from late US trade on Thursday but still not very far from Thursday's high of $1.3032 on trading platform EBS, its strongest level since Sept. 21. ECB President Mario Draghi said on Thursday that everything was in place for the bank to buy the bonds of troubled euro zone countries such as Spain and that conditions linked to it need not be punitive.
But Draghi, who was speaking after the ECB left interest rates unchanged at a record low 0.75 percent, offered no clues as to when Spain might make a formal aid request that would activate the programme.
Overall, traders seem to be waiting to sell the euro on rallies, but they are reluctant to do so now since Spain is considered likely to eventually seek assistance, said a trader for a Japanese brokerage house in Tokyo.
"People who want to go short are looking to do so after a Spanish request for aid triggers a rally in the euro," the trader said, referring to traders who are eager to put on bearish bets against the single currency.
In addition, the euro has been supported recently by the unwinding of euro-bearish bets against currencies such as sterling and the Australian dollar, he said, adding that the single currency may continue to find support until such buying subsides.
The euro eased 0.2 percent against the Australian dollar to A$1.2675, but was still hovering near a four-month high of A$1.2718 hit on Thursday.
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