Forexpros – The broadly weaker euro was sharply lower against the yen on Thursday, falling more than 1% on the day as concerns over a possible resurgence of the debt crisis in the euro zone weighed.
EUR/JPY hit 106.90 during European afternoon trade, the pair’s lowest since March 8; the pair subsequently consolidated at 107.17, tumbling 1.12%.
The pair was likely to find support at 105.69, the low of March 7 and resistance at 108.40.
The single currency came under broad selling pressure as Spain’s borrowing costs continued to rise following Wednesday’s poorly received government bond auction. The yield on the country’s 10-year bond climbed to 5.71% earlier, the highest level since mid-December.
Meanwhile, concerns over the outlook for growth in the euro zone mounted following a recent string of weak economic data.
Earlier Thursday, official data showed that German industrial production dropped 1.3% in February, more than expectations for a 0.5% drop, renewing concerns over the outlook for the bloc’s largest economy.
The data came one day after European Central Bank President Mario Draghi warned that “downside risks to the economic outlook prevail” after the central bank kept its benchmark interest rate unchanged at a record low of 1%.
The euro was also lower against the U.S. dollar and the pound, with EUR/USD falling 0.75% to hit 1.3044 and EUR/GBP down 0.31% to hit 0.8244.
The greenback remained supported after official data showing that U.S. jobless claims fell to the lowest level in nearly four years last week supported expectations that the Federal Reserve will hold off on implementing fresh monetary easing measures.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 31 fell to a seasonally adjusted 357,000, the lowest since April 2008 and slightly short of expectations for a decline to 355,000.
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