Euro, dollar weak in Asia as investors watch BoJ moves

TOKYO: The euro fell against major currencies and the yen continued to pressure the dollar in Asian trade Friday, dealers said, as the market awaited Tokyo's moves to stall the Japanese unit's rise.

The dollar eased to 85.28 yen in Tokyo afternoon trade, from 85.38 in New York Thursday. The euro slipped to 1.2798 dollars from 1.2821 and to 109.20 yen from 109.47 in New York.

Analysts said sentiment in the currency market was soured by uncertainty amid rumours that the Bank of Japan (BoJ) may hold an emergency meeting on new economic measures as early as Friday.

The Sankei Shimbun daily reported Thursday that the BoJ emergency meeting would take place before central bank chief Masaaki Shirakawa is set to meet Prime Minister Naoto Kan on Monday.

"We are hearing rumours that the BoJ may hold an emergency meeting," said Yuji Saito, forex analyst at Credit Agricole.

"Market players are looking to possible moves by the Bank of Japan," he said. "The euro is also losing direction amid the uncertainty."

The dollar sharply dropped last week to 84.90 yen, near its 15-year low, hurting the outlook for Japan's economic recovery, as a stronger yen poses a threat to the export sector.

Fears that Japan's recovery from recession is fading were heightened by weaker-than-expected gross domestic product data this week, showing that the economy grew by an annualised 0.4 percent in April-June.

In Tokyo shares were 1.76 percent lower in the afternoon Friday on the strength of the local currency.

Wall Street shares fell Thursday, ending a two-day rally, over larger jobless claims and weak manufacturing news.

The greenback was stronger against most other Asian currencies.

It rose to 1,182.79 South Korean won from 1,172.70 Thursday, to 44.97 Philippine pesos from 44.87, to 31.93 Taiwan dollars from 31.89 and to 1.3542 Singapore dollars from 1.3520.

The dollar also firmed to 8,967.50 Indonesian rupiah from 8,963.00 but softened to 31.53 Thai baht from 31.55.