Tokyo - The euro plunged to a one-year low against the yen in Asia on Thursday as investors shunned riskier currencies for the safe-haven Japanese unit amid the public deficit crisis afflicting Greece.
The euro fell to ¥120.44 briefly, its lowest level since February 24, 2009, before changing hands at ¥120.63 in Tokyo afternoon trade. The rate was sharply down from ¥122.03 in New York late on Wednesday.
The euro dropped to $1.3460 from $1.3534.
Because euro-selling for the Japanese currency involves selling dollars for yen in the process, the US unit also slipped to the lowest levels in some two weeks.
The dollar fell to ¥89.47, its weakest since February 10, down from ¥90.12 in New York.
The euro took a beating on news overnight that Standard & Poor's Rating Services warned of downgrading Greece by one or two notches within the next month, dealers said.
The Wall Street Journal also reported on Thursday that any bailout for Spain - whose $1.6 trillion economy is nearly double those of troubled eurozone partners Greece, Portugal and Ireland combined - would be far costlier.
"Although the report wasn't a particularly new topic, hedge funds, retail and institutional players took cues from it" on mounting concern that other areas in Europe may also suffer similar fiscal problems, a dealer said.
"Players will keep a close attention to whether the eurozone economy shows further weakness," the dealer at a major Tokyo bank told Dow Jones Newswires.
The single currency's plight triggered a decline in the pound, which fell to a 10-month low of ¥137.25, compared with ¥138.80 on Wednesday, and to a nine-month low at $1.5325 from $1.5398.
The dollar also lost ground against the yen after US news of weak home sales data and remarks by Federal Reserve chairperson Ben Bernanke that the central bank was not yet ready to abandon its ultra-low interest rates.
"Everybody had expected a good figure for January homes sales but it turned out to be so weak, prompting market players to sell dollars," said Daisuke Karakama, a market economist at Mizuho Corporate Bank.
"The Bernanke testimony fuelled the trend," he said, adding that the Greek crisis also helped boost the Japanese currency, which is considered even safer than the usual safe-haven dollar.
The dollar rose to 1,160.30 South Korean won from 1,152.15 on Wednesday, to $1.4112 Singapore dollars from $1.4087, and to 9,355.00 Indonesian rupiah from 9,310.00.
The dollar also firmed to 46.28 Philippine pesos from 46.12 while falling to $32.04 Taiwan dollars from $32.08.
- AFP