TOKYO: The euro slipped against the dollar andyen inAsian trade as fresh concerns over theEuropean debt crisis arose following a fresh downgrade of Greece's debt rating.
The single European currency traded at $1.4352 in early Tokyo trade, against $1.4364 late in New York on Wednesday. It also edged down to 111.87 yen from 111.97 yen.
The US unit stood at 77.95 yen, little changed from 77.96 in New York.
Putting downward pressure on the euro was Standard & Poor's decision to downgrade Greece's long-term debt rating further into "junk" status, saying plans to help bail the country out would entail a selective default.
Cutting the rating from CCC to CC S&P said "the proposed restructuring of Greek government debt would amount to a selective default under our rating methodology."
Traders were also digesting remarks by German Finance Minister Wolfgang Schaeuble, who said the European Financial Stability Facility -- set up to help distressed economies --did not have a "blank cheque" to buy back Greek bonds.
Allowing the EFSF to buy sovereign bonds at lower prices was one of a raft of measures agreed at a summit last week aimed at helping Greece and preventing contagion in other states.
Also negative for the euro was Moody's downgrade of Cyprus's rating, citing its weakening medium-term credit fundamentals.
Dai Sato, dealer at Mizuho Corporate Bank, said "Schaeuble's remark reminded the market of the eurozone woes, while global stock markets' slump on the stalled US debt talks dented investors' risk appetite and led to selling of the risk-sensitive euro."
The dollar was rangebound against the yen amid a stand-off in Washington, where Republicans and Democrats remain split on how to cut the deficit and raise the $14.29 trillion debt limit to avoid a catastrophic default.
"Investors cannot move either way in Tokyo as there is no fresh news, while real demand-backed players are relatively quiet," Sato said.
"The market remains focused on the outcome of the US negotiations, having the risk scenario of the nation's credit downgrading in mind," he said.
However, even if a default is averted, investors worry that the tense stalemate may prompt rating agencies to downgrade their US top-notch credit rating.
