Forexpros – The euro fell to its lowest level in 12 years against the safe haven yen on Monday, as concerns over the debt crisis in the euro zone escalated, amid fears that Spain will require a full bailout.
EUR/JPY hit 94.24 during early European trade, the pair’s lowest since late November 2000; the pair subsequently consolidated at 94.34, tumbling 1.11%.
The pair was likely to find support at 92.00 and resistance at 95.25, the session high.
Concerns that Spain may require a full bailout mounted after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend. On Friday, Spain’s government cut growth forecasts for 2013 and said the economy would stay in recession next year.
The yield on Spanish 10-year bonds rose to a record 7.50% Monday, well above the critical 7% threshold widely considered unsustainable in the long run.
In addition, fears over a Greek exit from the euro zone resurfaced, as Athens requested more time to meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
Earlier in the day, Japanese Finance Minister Jun Azumi reiterated that Tokyo was ready to take decisive steps against speculative moves or excessive volatility in the yen, amid concerns over the impact on the country’s largely export driven economy from the stronger currency.
The broadly stronger yen rose to a seven-week high against the U.S. dollar, with USD/JPY down 0.61% to 78.01.
Neither the euro zone nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in Europe.
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