Euro steady on positive economic data

Tokyo - The euro held steady Friday after surging in New York on encouraging economic data in the eurozone, including a welcome pick-up in prices and stronger-than-expected growth in Spain.

With most major Asian markets closed for holidays, trading was thin in Tokyo where the euro bought $1.1206 and ¥134.10 compared with $1.1224 and 134.00 yen in New York.

However, the single currency is sharply higher than $1.1103 and ¥132.31 seen earlier Thursday in Tokyo.

"Players are buying back the euro due to some brighter economic indicators," said Minori Uchida, head of Tokyo global markets research at Bank of Tokyo-Mitsubishi UFJ.

"But this does not mean a reverse of the trend. The euro is still subject to selling pressure."

The single currency jumped after figures showed eurozone inflation at zero in April, the first time it has been out of negative territory in four months, while Spain's economy grew in January-March at its fastest pace since 2007.

Euro-buying has also been supported by hopes Greece will be able to strike a bailout reform deal with its creditors that will help it avert a bailout and remain in the eurozone.

In other trading on Friday, the dollar rose to ¥119.66, from ¥119.38 in New York.

Currency markets were largely unaffected by a series of economic indicators released by the Japanese government early Friday, including inflation, household spending and unemployment, dealers said.

Japan's core inflation picked up for the first time in 10 months in March, offering a sliver of hope for the Bank of Japan, which has been struggling to beat years of deflation.

Core inflation, excluding volatile fresh food prices, hit 2.2% in March, logging the positive reading since May 2014, the internal affairs ministry said.

However, stripping out the impact of a sales tax rise last year, the figure was a tepid 0.2%, well short of the central bank's 2.0% target.

The unemployment rate edged down to 3.4% in March from 3.5% in February, but household spending fell nearly 11 percent as last year's levy hike continues to drag.

Analysts say policymakers will almost certainly be forced to expand the BoJ's monetary easing scheme - which would tend to weaken the yen - in a bid to jack up prices and counter a downturn in the world's number three economy.

The dollar was mixed against other Asia-Pacific currencies.

It firmed to 1 078.54 South Korean won from 1 069.25 won on Thursday, to Tw$30.64 from Tw$30.62 and to 33.03 Thai baht from 32.76 baht.

The greenback also rose to 12 970.00 Indonesian rupiah from 12 923.90 rupiah while it weakened slightly to 44.59 Philippine pesos from 44.60 pesos and to 63.42 Indian rupees from 63.50 rupees.

It was unchanged at Sg$1.3237.

The Australian dollar declined to 78.90 US cents from 79.84 cents and the Chinese yuan gained to ¥19.28 from ¥19.12.