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Tokyo - The euro on Friday recouped early losses after Standard & Poor's cut Spain's credit rating as speculative buybacks emerged ahead of weekend talks of the G20 finance chiefs.
The euro bought $1.3788 in Tokyo afternoon trade, marginally up from $1.3783 in New York late on Thursday.
The common European currency fell to $1.3722 in early Tokyo trade after S&P downgraded Spain's credit rating by a notch in the latest reminder of the scope of the eurozone's debt problems.
It recouped losses in afternoon trading as some short-term speculators bought it back ahead of a weekend meeting of the Group of 20 finance ministers and central bank heads in Paris, said a senior dealer at a major Japanese bank.
Dealers said they would be watching the G20 talks for any developments on plans to deal with Europe's debt problems.
Against the Japanese currency, the euro changed hands at ¥106.01 compared with ¥105.92 in New York. The dollar edged up to ¥76.94 from ¥76.85.
S&P cut Spain's credit rating to "AA-" from "AA" with a negative outlook on Thursday, following earlier downgrades to the country's top banks.
Dealers and analysts said the euro's losses were limited as the S&P move closely followed Fitch Ratings' downgrade of Spain by two notches to "AA-" last week.
"Such a downgrade was already expected," said Koji Fukaya, director of fixed income and global foreign exchange research at Credit Suisse.
"Now the market is looking toward expected capital injections by governments in the eurozone, which would be supportive for the euro," he said.
Still, Fukaya noted investors remain hesitant to buy the unit amid talk of bigger losses for private investors holding Greek debt.
Singapore's central bank on Friday eased monetary policy for the first time in over two years, a move that followed a surprise rate cut by the Indonesian central bank this week.
The Singapore dollar rose following the rate cut. The US currency was at Sg$1.2710, down from around Sg$1.2781 before the announcement.
Analysts say such moves by Asian central banks underline concerns that deepening debt and economic problems in the West could severely hurt growth in many of Asia's export-dependent economies.
On Thursday the IMF warned in a report that Asia faces "downside" risks due to fallout from the eurozone debt crisis and a slowing US economy.
"There is 'no place to hide' when advanced markets come under pressure," it said.
The dollar edged up to 1 159.20 South Korean won from 1 154.40 one day earlier, to 30.83 Thai baht from 30.79, to 8 880.00 Indonesian rupiah from 8 840.00, and to 43.42 Philippine pesos from 43.27.
The greenback held firm at Tw$30.30.
