Forexpros – The euro on Monday shot up against the yen on news that eurozone finance officials will arrange EUR100 billion in assistance to Spain to help the country recapitalize its banks.
In Asian trading on Monday, EUR/JPY hit 100.67, up 1.22%, up from a low of 100.33 and off a high of 100.92.
The pair sought to test support at 99.42, the low of June 7, and resistance at 100.92, the earlier high.
Spain has become the fourth eurozone country to seek emergency credit, following Greece, Portugal and Ireland by asking for help and accepting EUR100 billion.
The country had been feeling increasing pressure to prop up its banking sector as well as from calls from the regional government of Catalonia to help refinance its debts, which sent yields in Spanish government debt auctions spiking well over 6% and the euro weakening against the dollar.
Rating’s agency Fitch slashed Spain’s credit rating by three notches to triple-B on Friday and warned further cuts could come if the country fails to stabilize its banking sector.
The euro was saw downward pressure from news out of Germany, imports fell by the most in two years in April, dipping 4.8%.
Weekend news that eurozone countries have agreed to assist Spain sparked relief demand for the European currency and sent reserve currencies such as the yen falling.
The euro, meanwhile, was up against the pound and up against the Canadian dollar, with EUR/GBP up 0.43% at 0.8126 and EUR/CAD up 0.45% and trading at 1.2904.
Later Monday in the eurozone, France will publish its latest industrial production figures, a key gauge of economic health.
In the U.S., Federal Reserve Bank of Chicago President Charles Evans is due to speak in public,
Japan will release manufacturing data as well as preliminary data on machine tool orders.
Bank of Japan Governor Masaaki Shirakawa is due to appear in public as well.
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