Forexpros – The euro fell to an eight-day low against the yen on Tuesday, as renewed concerns over growth perspectives in the euro zone and Greece’s sovereign debt troubles supported safe haven demand.
EUR/JPY hit 106.21 during European afternoon trade, the pair’s lowest since February 23; the pair subsequently consolidated at 106.34, tumbling 1.35%.
The pair was likely to find support at 105.42, the low of February 22 and resistance at 108.03, Monday’s high.
The single currency came under pressure after Eurostat reported that the euro zone’s gross domestic product shrank by a seasonally adjusted 0.3% in the fourth quarter, in line with expectations and unchanged from a preliminary estimate.
Annualized GDP contracted at a rate of 0.7%, also in line with expectations and unrevised from an initial estimate.
The data fuelled concerns over the outlook for global growth, coming one day after Chinese Premier Wen Jiabao said his government will target expansion of 7.5% in 2012, the lowest GDP target in eight years.
Investors also remained jittery ahead of the March 8 deadline for Greece’s private creditors to sign on to a EUR106 billion debt swap deal, a requirement for Athens to tap a recently approved EUR130 billion bailout fund.
Earlier in the day, Greek finance minister Evangelos Venizelos strongly urged private sector creditors to take part in the debt swap deal and warned that it was the best offer they would receive.
Elsewhere, the yen was also higher against the U.S. dollar with USD/JPY declining 0.66%, to hit 81.01.
Also Tuesday, government data showed that average cash earnings in Japan were unexpectedly flat in January, after a 0.1% rise the previous month.
Analysts had expected average cash earnings to fall 0.3% in January.
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