Hong Kong, July 12 (BridgeNews) - The U.S. dollar remained heavy against the major currencies in Asian morning trade Thursday after having fallen overnight on concerns about the U.S. equity markets and the weakness in the emerging markets. Against the yen, however, the dollar recovered slightly to a high of 124.52 after Moody's Investors service said downward pressure remains on Japan's government debt rating, but it pulled back shortly to around 124.20.
The dollar fell to as low as 123.95 to the yen in early morning trade, compared with the New York close of 124.37.
The greenback fell to 123.95 in early morning trade mainly on selling from Japanese players.
However, it found support below 124.00 as U.S. players emerged to buy the U.S. unit for what appeared to be buying-on-dips.
The dollar extended gains to an intraday high of 124.52, helped by Moody's comments and comments from International Monetary Fund First Deputy Managing Director Stanley Fischer.
Moody's said it retains its negative outlook on Japan's Aa2 local currency rating and said the country's Aa1 foreign currency rating outlook is stable.
In its annual report, the credit rating agency said Japan's Aa1 foreign currency debt and bank deposit ceilings and Aa2 rating on domestic yen-denominated securities are a reflection of a nation struggling with serious fiscal imbalances.
Fischer said a weaker yen and further monetary easing would help Japan's economy, but added that Japan should gradually back off from fiscal stimulus in light of the huge public debt.
Speaking alongside Fischer, Japan's Vice Finance Minister for International Affairs Haruhiko Kuroda said that the BOJ's current policy would allow further easing, but foreign exchange levels should reflect economic fundamentals.
Meanwhile, Japanese stocks rallied as gains in the Nasdaq and positive earnings news from U.S. firms including Yahoo! Inc., Motorola Inc. and Microsoft Corp. gave technology issues in Japan a welcome boost. The Nikkei 225 Stock Average finished the morning session up 176.40 points, or 1.5%, at 12,181.51.
In other currency trading, euro/dollar fell from 0.8583 to 0.8560 as euro-selling orders to cut losses were triggered below 0.8580, following the surge in Nasdaq futures.
The pair held above the former downtrend resistance line at 0.8550. Euro/yen failed to attract interests in the morning trade and traded in a range of 106.32-89, influenced mostly by movements in euro/dollar and dollar/yen.