Euro sinks on eurozone fears

TOKYO: The euro, hammered by escalating eurozone fears, sank to a fresh 23-month low against the dollar in Asian trade Friday, a day after touching its lowest level against the yen in more than a decade. The single currency was changing hands at $1.2331 in Tokyo morning trade from $1.2361 in New York late Thursday. Earlier Friday the 17-nation unit briefly fell to $1.2323, its lowest level on the dollar since July 2000. It also remained weak against the safe-haven Japanese currency at 96.89 yen, compared with 96.82 yen in New York late Thursday. Overnight, the euro hit 96.51 yen, its lowest level since December 2000. The dollar bought 78.60 yen, from 78.33 yen in New York. The European currency has been pummelled amid fears that debt-riddled Greece may leave the eurozone and Spain’s banking troubles could require an international rescue. The yen’s jump prompted Japanese Finance Minister Jun Azumi on Friday to pledge “decisive action” if the currency keeps rising, with his remark interpreted as a threat of market intervention to curb the yen’s strength. Japanese financial authorities have previously intervened in currency markets, including after the yen reached historic highs against the dollar last year. Analysts said there was little immediate hope for a euro recovery.”Risk-off sentiment stemming from European debt concerns is strong,” said Daisaku Ueno, senior foreign exchange and fixed income strategist at Mitsubishi UFJ Morgan Stanley. Markets were also focusing on US non-farm payrolls and eurozone unemployment data, both due out later Friday. The dollar and yen may remain strong as investors flock to safe-haven currencies but many will “take a wait-and-see approach before the release of the non-farm payrolls data,” Ueno told Dow Jones Newswires. “There shouldn’t be any big bets during Tokyo trading hours,” he added. China and Japan started direct currency trading on Friday, the first time Beijing has allowed a major currency besides the US dollar to swap directly with the yuan. The move — which allows for trade without using the greenback as an intermediary currency — marked the latest chapter in Beijing’s bid to eventually turn the yuan into a global benchmark currency rivalling the dollar. The yuan stood at 12.335 yen in thin, but apparently glitch-free, trade on its first day swapping with the Japanese currency. (AFP)