The euro weakened in Asian trade on Tuesday as markets largely shrugged off a eurozone finance ministers’ deal to bail out debt-riddled Spain, with the yen getting a safe-haven boost.
The common currency was changing hands at $1.2284 in Tokyo afternoon trade against $1.2312 in New York late Monday.
Against the Japanese currency, the euro bought 97.66 yen from 97.95 yen in US trade the previous day, while the dollar also weakened to 79.49 yen from 79.56 yen.
Traders have increasingly eyed the Japanese currency as a safe-haven unit amid concerns about Europe and a US economic recovery, although Tokyo has insisted the yen was overvalued.
Finance ministers from the 17-nation eurozone agreed to a rescue deal for Spain at talks ending early Tuesday in Brussels, with a first tranche of 30 billion euros ($37 billion) to help its troubled banking sector by the end of the month.
After nine hours of talks ended beyond midnight, the ministers also agreed to extend a 2013 deadline for Spain to cut its public deficit to the European Union 3.0 percent limit by one year.
Jean-Claude Juncker, who heads the eurozone finance ministers group, told reporters that the deadline was extended in view of the difficult economic conditions Spain faced.
In exchange for the loans, the eurozone will demand reforms of specific banks as well as the banking sector as a whole.
The deal to help Spain is part of a broader package aimed at propping up the troubled bloc.
“These agreements are more or less details of procedures and unlikely to affect the entire picture of the eurozone trouble,” said Yosuke Hosokawa, head of FX sales team at Sumitomo Mitsui Trust Bank.
“Everybody knows it will take considerable time to resolve the problem.”
Junichi Ishikawa, forex analyst at IG Market Securities in Tokyo, told Dow Jones Newswires that “this really doesn’t come as a surprise”.
The dollar traded mixed against other Asia-Pacific currencies.
The greenback weakened to Sg$1.2717 from Sg$1.2725 on Monday, to 41.89 Philippine pesos from 41.98 pesos, to 55.78 Indian rupees from 55.92 rupees and to 31.73 Thai baht from 31.77 baht.
The greenback firmed to 1,143.45 South Korean won from 1,142.70 won, to Tw$29.94 from Tw$29.92 and to 9,443 Indonesian rupiah from 9,440 rupiah, while the Australian dollar changed hands at US$1.0168 against US$1.0184.
The Chinese yuan was unchanged at 12.49 yen.
