Euro eases despite support for Greece

TOKYO: The euro eased in Asian trade Thursday, weighed by continued nervousness about Greece's fate, despite positive noises of support for Athens from France and Germany.

The euro slipped to $1.3710 in Tokyo, from $1.3750 in New York late Wednesday. The European common currency was also lower against the Japanese unit, trading at 105.18 yen against 105.38 in New York.

In a much-needed vote of confidence for debt-wracked Greece, German Chancellor Merkel and French President Sarkozy said they were convinced the country's future lay within the eurozone.

The backing from two of Europe's major economies came after a conference call with Greek Prime Minister George Papandreou and against the backdrop of mounting international pressure on the European Union to get its house in order.

But persistent expectations of a Greek default or even an exit from the eurozone continued to shake the markets.

Tsunemasa Tsukada, chief manager of the forex team at Mitsubishi UFJ Trust and Banking Corp., said the uncertainty over the European economy remained, with some investors still extremely wary of risk-taking.

Even the assurance by Germany and France "has yet to remove investors' concerns about the fate of Greece completely," Tsukada said. "Some market players still think a Greek default is possible."

Investors are looking to an informal meeting of EU finance ministers and central bankers on Friday, in which US Treasury Secretary Timothy Geithner will participate.

The meeting in the southwestern Polish city of Wroclaw comes amid mounting pressure, including from the United States, for countries inside the eurozone to get a grip on the sovereign debt crisis.

As the single European currency remained the focus of investors, the dollar was traded in a tight range against the Japanese yen.

The greenback edged up to 76.73 yen, compared with 76.64 yen after Japan's new Prime Minister Yoshihiko Noda, again expressed concern about the persistently high value of the yen, telling parliament the government will act decisively against speculative market moves.

A soaring yen, which inflates the price of Japanese products in markets overseas, erodes the profits of Japanese manufacturers.

"We are concerned about continuation of the yen's one-sided strength in the forex market," said Noda.

"We will continue to carefully monitor the market for speculative moves. There is no change to my belief that we will take decisive action, when necessary, by considering all options." (AFP)