Euro remains under selling pressure in Asia

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TOKYO: The euro faced continued selling pressure in Asia on Friday as a tumbling global stock market continued to erode risk appetite and push the European single currency down, dealers said.

The euro fell to $1.4312 in Tokyo morning trade from $1.4337 in New York late Thursday.

Against the Japanese yen, the euro stood at 109.65 yen, unchanged from New York but down from 110.26 yen late Thursday in Tokyo.

Despite moves to stall its rise by the Swiss central bank, the Swiss franc strengthened to 1.1381 francs per euro, compared with 1.1464 francs late Thursday in Tokyo.

But it fell to 0.7953 against the dollar from 0.7936.

"In general, players are avoiding taking unnecessary risks," said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ. "I don't see any reasons for supporting the euro above $1.45 now."

In New York, panicky stock market selling on Thursday pushed the euro down and the safe-haven Swiss franc higher, while gold hit a new record high and US bond yields plumbed all-time lows.

Markets were driven by new fears of recession in Europe and the United States after a Morgan Stanley report warned that growth in both was almost completely stalled.

Japan's Nikkei index lost 2.15 percent Friday morning after shares on Wall Street and in Europe plunged.

The dollar changed hands at 76.61 yen in Tokyo Friday against 76.52 yen in New York late Thursday amid ongoing speculation over a possible yen-selling intervention.

"In terms of intervention, Japan's stance has not changed," Kamei said.

The Japanese currency, seen as a safe-haven unit amid market turmoil, last week neared its post-World War II high of 76.25 to the dollar.

Japan intervened on forex markets in early August, selling yen and buying dollars, and has signalled that it stands ready to do so again.

Dealers also said that market participants were likely to stay on the sidelines, awaiting Federal Reserve Chairman Ben Bernanke's highly anticipated speech on August 26. (AFP)