WSJ:WORLD FOREX: Hopes On Greek Talks Buoy Euro, Yen Stronger
-- Euro firms amid hopes for conclusion of Greek debt talks
-- Dollar continues slide against yen on expectations of low U.S. rates
-- U.S. Consumer Confidence Index, German employment data, eyed for cues
By Alexander Martin
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--The euro regained some of its footing against the dollar and yen during Asian trading Tuesday amid renewed hopes that a deal may be reached sometime soon in the ongoing Greek debt write-off negotiations.
Speaking in Brussels, Greek Prime Minister Lucas Papademos raised hopes that a deal on a second bailout can be struck by the end of the week with the troika of the European Union, European Central Bank and the International Monetary Fund, citing significant progress in talks with private creditors.
"The market is feeling positive that the Greek talks are heading toward a conclusion," said Daisaku Ueno, currency strategist at UBS in Tokyo, although he warned that the single currency was still vulnerable to headline risk.
As of 0450 GMT the euro was at $1.3193 against the dollar, from $1.3141 late Monday in New York, according to figures from EBS. Traders at major Japanese banks cited a broad weakness of the dollar as an additional factor pushing up the euro. The greenback has been suffering since the U.S. Federal Open Market Committee's recent decision to extend its easy monetary policy.
The euro was also at Y100.55 from Y100.33.
The dollar was weaker against the yen, falling to a three-month low of Y76.17, from Y76.33, raising expectations of yen-selling intervention by Japanese authorities.
Japanese Finance Minister Jun Azumi on Tuesday issued a fresh warning that he will take "decisive steps" if speculators push the yen up too sharply.
"If there is excessive volatility or really speculative movement, I will be vigilant against it, and I will take decisive steps if necessary," he said.
"The yen is approaching its strongest levels since the last intervention" in October 2011, said Kengo Suzuki, foreign exchange strategist at Mizuho Securities in Tokyo, although he said caution over intervention was likely to prevent the dollar from falling below Y76.00 during Tuesday's trading.
The market will be eyeing the release later in the day of the January ISM-Chicago purchasing managers' index, the U.S. January consumer confidence index as well as German data on retail sales and employment changes.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 78.847 from 78.902.
Interbank Foreign Exchange Rates At 2350 EST / 0450 GMT
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