Forexpros – The euro edged lower against the yen on Tuesday, as sentiment remained under pressure amid sustained concerns over the debt crisis in the euro zone while expectations for new easing measures by the Bank of Japan weighed on the yen.
EUR/JPY hit 106.32 during European afternoon trade, the daily low; the pair subsequently consolidated at 106.66, inching down 0.14%.
The pair was likely to find support at 105.94, the low of April 12 and resistance at 107.45, the high of April 10.
The euro remained mildly supported after an auction of Dutch government debt, but fears that the country could lose its triple-A credit rating lingered following the collapse of the government on Monday.
Sentiment on the shared currency remained fragile after an auction of Spanish bills saw the country’s short-term borrowing costs almost double.
Spain sold EUR725 million of three-month bonds at a yield of 0.63%, up from 0.38% in March and EUR1.2 billion of six-month bonds at a yield of 1.58%, up from 0.83% last month.
The auction came one day after the Bank of Spain confirmed that country’s economy entered a recession in the first quarter, with gross domestic product contracting by 0.4% in the three months to March, following a contraction of 0.3% in the fourth quarter.
Meanwhile, Italy auctioned EUR3.34 billion of government bonds at the highest costs since January.
Elsewhere, the yen remained under pressure amid growing expectations that the BoJ will chose to implement further monetary easing at its next policy-setting meeting on April 27.
BoJ Governor Masaaki Shirakawa said at a meeting last week that central bank remains “committed” to monetary easing.
The yen was also fractionally higher against the U.S. dollar with USD/JPY retreating 0.11%, to hit 81.07.
Later in the day, the U.S. was to release an industry data on house price inflation, as well a report on consumer confidence and government data on new home sales.
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