Forexpros – The euro was steady against the yen on Thursday, hovering close to a ten-year low after a successful Spanish bond auction as investors remained concerned over the handling of the euro zone’s debt crisis.
EUR/JPY hit 101.06 during European afternoon trade, the pair’s lowest since October 4; the pair subsequently consolidated at 101.42, inching up 0.05%.
The pair was likely to find support at 100.74, the low of October 4 and resistance at 102.71, the high of October 5.
The single currency found support earlier after an auction of Spanish government debt met with stronger-than-expected investor demand earlier.
Spain’s Treasury sold EUR6 billion of medium-and-long-term bonds, far surpassing a target of EUR3.5 billion.
The country sold EUR2.5 billion of five-year bonds at an average yield of 4.02%, down sharply from 5.27% at a similar auction last month. Spain also auctioned EUR1.4 billion in ten-year bonds at a yield of 5.54%, compared to 6.97% at a November bond sale.
But the euro remained under pressure after the European Central Bank’s monthly report said the debt crisis in the region still posed a substantial threat to the economic outlook.
The report came after data showing that manufacturing activity in the euro zone rose unexpectedly in December, but remained in contraction territory for the fourth consecutive month.
A separate report showed that consumer price inflation in the euro zone remained unchanged at an annualized rate of 3% in December, in line with expectations.
Elsewhere, the yen was higher against the U.S. dollar with USD/JPY dropping 0.38%, to hit 77.77.
Earlier Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell to a three-year low of 366,000, while a separate report showed that manufacturing activity in the New York area jumped to a seven-month high.
Meanwhile, official data showed that producer price inflation in the U.S. rose 0.3% in November, broadly in line with expectations.
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