The euro remained weak in Asian trade yesterday as investors shunned assets viewed as risky following falls on world stock markets triggered by fresh worries about the economic outlook.
The euro was quoted at US$1.4922 in Tokyo afternoon trade, unchanged from New York late Thursday, while falling to 132.62 yen from 132.78. The dollar softened to 88.89 yen from 88.99.
"Over the past few days, patches of weakness in economic data have seen fears over the strength and durability of the economic recovery return," said NAB Capital strategist John Kyriakopoulos.
"As a result, 'commodity currencies' like the Australian dollar were shunned in favour of 'safe-haven' currencies like the U.S. dollar and the yen," he added.
The organization for Economic Cooperation and Development (OECD) said Thursday the pace of recovery in the global economy would be "modest," and forecast interest rates in the United States and Europe to remain "close to zero" until late 2010.
The Bank of Japan (BoJ) wrapped up a monetary policy meeting Friday, leaving its key lending rate at 0.1 percent to fight stubborn deflation.
"Given that official concerns about deflation are intensifying, interest rates are unlikely to go up for a long while," said Calyon analyst Mitul Kotecha.
"We only look for the first rate hike to take place in the second quarter of 2011."
Everything happening in the currency market "can be explained by stock moves today," said Koji Takeuchi, a senior economist at Mizuho Research Institute.
"Players were unwinding euro-holdings that they had accumulated in past weeks as falls in regional shares dented players' risk-tolerance." Tokyo's benchmark Nikkei-225 index closed down 0.54 percent on Friday.
At its previous meeting last month, the BoJ announced it would halt some of its emergency measures to tackle the financial crisis at the end of the year.
The dollar fell in Asian trade. It dropped to 1.3867 Singapore dollars from 1.3877 on Thursday and to 9,470 Indonesian rupiah from 9,510.
It rose to NT$32.33 from NT$32.19, to 47.12 Philippine pesos from 46.90 and to 1,157.90 South Korean won from 1,157.15 while holding steady at 33.21 Thai baht.
