WSJ:WORLD FOREX: Euro Falls On Doubts Over Greek Ability To Curb Deficit
--Euro falls to fresh eight-month low versus the dollar.
--Concerns continue over Greek ability to curb its deficit.
--Market focused on meeting of euro zone finance ministers later in day.
By Kosaku Narioka
Of DOW JONES NEWSWIRES
TOKYO -(Dow Jones)- The euro fell to a fresh eight-month low against the dollar in Asia Monday due to continuing concerns over the Greek debt crisis before a meeting of euro zone finance ministers later in the day.
Declines in Asian stock markets also weakened risk sentiment, hurting higher-yielding currencies such as the euro, dealers said. Japan's Nikkei Stock Average was down around 2.1% as of 0530 GMT, while Australia's S&P/ASX 200 closed down 2.8%.
The common currency fell on news that the Greek government said it will miss its deficit target this year, even as it moves ahead with a plan to slash thousands of public-sector jobs to meet the demands of its international creditors.
Uncertainty also remained over the expansion of the European Financial Stability Facility, with the Slovakian government--due to vote on the expansion later this month--remaining split on the issue.
"Concerns are growing that discord in the euro zone may heighten," said, Tsunemasa Tsukada, chief manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking Corp.
If a euro-zone finance ministers meeting later in the day fails to remove uncertainty over the region's debt, "the market will likely remain cautious," he said.
Comments from a senior European Central Bank official during Asian trading hours failed to improve market sentiment.
Christian Noyer, a member of the ECB's board of governors and governor of the Bank of France, said that concerns over French banks' exposure to the sovereign debt of fiscally challenged countries such as Greece, Spain and Ireland were exaggerated.
"Total exposure of major French banks to the sovereign risk of so-called 'peripheral countries' amounts to...only a limited fraction of their core tier one capital," said Christian Noyer, a member of the ECB's board of governors and governor of the Bank of France.
Meanwhile, the Bank of Japan's closely watched tankan survey showed a rebound in corporate sentiment Monday, with the headline index returning to positive territory for the first time since March.
Provided the yen and the Nikkei stay around current levels, the improvement in the tankan means the Bank of Japan is unlikely to take additional easing measures at its next policy board meeting, said Daisuke Karakama, market economist at Mizuho Corporate Bank.
The euro was at $1.3329 as of 0450 GMT, after falling to a fresh eight-month low of $1.3314, from $1.3390 late Friday in New York, according to EBS, and was at Y102.69 from Y103.12.
The U.K. pound was at $1.5503 from $1.5587. The dollar was at Y77.00 from Y77.09. The dollar was at CHF0.9113 from CHF0.9065.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 79.077, after rising to its fresh eight-month high of 79.136, from 78.793.
Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT
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