Hong Kong, Aug. 30 (BridgeNews) - The euro remained heavy against the yen in particular in morning trade in Asia Thursday, as euro/dollar extended its overnight losses and dollar/yen retreated after overnight gains. The cross fell from 109.25 to 108.85 this morning. As a result, the yen strengthened slightly despite the ongoing weakness in Japanese stock markets.
Dollar/yen fell from 120.26 to 119.93 on Japanese exporter selling. Downside was limited by short covering from speculative accounts after the sharp bounce off 119.08.
A break of 120.95 would confirm a double bottom at 119.05/08. Toyota Motor President Fujio Cho said dollar/yen in a range between 110 and 120 would be desirable, indicating the current foreign exchange level would be acceptable for major exporters despite some jawboning from Japanese economic officials.
Bank of Japan Governor Masaru Hayami repeated recent comments that it is desirable for foreign exchange rates to be stable, reflecting economic fundamentals.
He said the recent weakness of the greenback is due to the slowing of the U.S. economy.
The market reacted little to jawboning from Japanese Vice Finance Minister for International Affairs Haruhiko Kuroda who said a strong yen is not good and desirable and that while the European single currency should strengthen further.
Kuroda said the yen is too strong especially against the euro and that the Finance Ministry would not notify the market in advance in case of intervention.
Vice Finance Minister Toshiro Muto said the ministry is monitoring stock and foreign exchange markets with great interest and will take action if there are big foreign exchange fluctuations.
Weak economic data out of Japan and sluggish stock performance did not pressure the yen this morning.
Japan's seasonally adjusted industrial and mining production fell 2.8% in July from June, which was worse than private economists' average outlook of a 2.1% fall.
The Nikkei 225 Stock Average fell 112.17 points, or 1.0%, to 10,867.59 spurred by Wall Street's losses in the face of upwardly revised U.S. gross domestic product data, as well as weaker-than-expected Japanese industrial output data.
In other currency trading, euro/dollar settled around 0.9075, amidst some lingering hopes of European Central Bank easing at Thursday's board meeting.
This followed an early fall from 0.9083 to 0.9060 on position squaring selling after the overnight fall.