Forexpros – The euro steadied close to a one-month low against the yen on Monday, as investors eyed the conclusions of a meeting of euro zone ministers due to begin later in the day, while euro zone debt concerns and global growth fears continued to weigh.
EUR/JPY hit 98.05 during European afternoon trade, the daily high; the pair subsequently consolidated at 97.85, inching down 0.02%.
The pair was likely to find support at 97.03, the low of June 5 and resistance at 99.09, the high of July 6.
Sentiment on the euro remained fragile as European Central Bank President Mario Draghi reiterated comments made last week, after the bank cut its benchmark interest rate to a record low of 0.75%, saying that economic indicators for the second quarter point to weakening growth in the euro zone.
In testimony before the European Parliament in Brussels, Draghi added that inflation will most likely decline further in 2012 and fall below 2% in 2013.
The comments came as the yield on Spain’s 10-year government bonds climbed to 7.11% earlier, above the 6% threshold, widely seen as unsustainable, ahead of a meeting of euro zone finance ministers later Monday.
Euro zone officials were expected to discuss a plan announced last month and designed to help the region’s indebted countries and their struggling banking systems.
The single currency also remained under pressure after data showed earlier that investor confidence in the euro zone for July deteriorated to the lowest level since July 2009, remaining in negative territory for the 12th consecutive month.
Sentix research group said its index of investor confidence declined to minus 29.6 in July from June’s reading of minus 28.9.
Meanwhile, concerns over the outlook for global growth persisted after disappointing economic reports from the U.S. and China. Chinese Premier Wen Jiabao said over the weekend that the country’s economy faces “relatively large” downward pressure in the near-term.
Elsewhere, the yen was higher against the U.S. dollar with USD/JPY falling 0.13%, to hit 79.56.
Also Monday, government data showed that the Japan’s trade surplus narrowed to JPY0.28 trillion in May, its lowest level since 1985, from a surplus of JPY0.29 trillion the previous month.
A separate report showed that core machinery orders in Japan fell the most in seven years in May, tumbling 14.8%, far more than expectations for a 2.4% decline.
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