TOKYO: The euro bounced around in thin and volatile holiday trade against major currencies Thursday after hitting a 10-year low against the Japanese unit in New York.
The single European currency fell to $1.2926 and 100.50 yen in the afternoon in Tokyo, rebounding from the day's low of $1.2887 and 100.30 yen early on.
The levels compared with $1.2912 and 100.80 yen late Wednesday in New York.
Meanwhile, the dollar stood at 77.79 yen, from 77.90 in New York.
Traders said there were no new fundamental factors driving the euro's weakness, but the impact of sell orders was being magnified due to thin year-end flows in Asian markets.
The effect of the single currency's selloff overnight has waned, but general pessimism over the European debt crisis has continued to weigh, they said.
In New York Wednesday, the single European currency fell to 100.73 yen, its lowest level since June 2001, while also plunging against the greenback below the $1.30 line to its lowest level since January 11.
The euro was sold despite some initial positivity on a successful Italian bond auction when Rome raised 9.0 billion euros at a rate of 3.251 percent for six-month notes, half the 6.504 percent it paid in November.
But some analysts suggested that European banks making use of low-cost European Central Bank money were largely behind the auction's success.
Sentiment soured as yields on 10-year Italian bonds jumped to a painful 6.9 percent later in the day, raising worries about Rome's plans to sell longer-term bonds on Thursday.
This week's auctions are being seen as a bellwether for market sentiment on Italy -- the eurozone's third largest economy -- but also for the euro area at the end of a year that has raised serious questions about the future of the project.
"Investors' euro-sentiment is so bad, and it's getting even worse," Daiwa SB Investments senior fund manager Kenichiro Ikezawa told Dow Jones Newswires, adding market players will focus on the auction of Italy's 10-year bonds.
"Since the 10-year tender results have been somewhat poor lately, the euro may reverse its course if the outcome turns out to be positive," Ikezawa added.
The dollar was mixed against other Asian currencies.
It rose to Sg$1.3007 from Sg$1.2975 Wednesday and to 31.69 Thai baht from 31.57.
But it fell to 43.83 Philippine pesos from 43.92, to 9,145.00 Indonesian rupiah from 9,185.00, to Tw$30.28 from Tw$30.31 and to 1,152.50 South Korean won from 1,156.30.
