TOKYO: The euro fell sharply against major currencies in thin Asian trade Thursday after it hit a 10-year low against the Japanese unit in New York.
The euro fell to $1.2903 and 100.49 yen in early Tokyo trade, down from $1.2912 and 100.80 yen late Wednesday in New York.
The dollar stood at 77.86 yen, barely changed from 77.90 in New York.
A senior dealer at a major bank in Tokyo said the overall selling volume was not large, meaning the impact of euro sell orders was being magnified due to thin year-end flows in Asian markets.
In New York Wednesday, the single European currency fell to 100.73 yen, its lowest level since June 2001, while also plunging against the greenback below the $1.30 line to its lowest level since January 11.
The euro was sold despite some initial positivity on a successful Italian bond auction when Rome raised 9.0 billion euros at a rate of 3.251 percent for six-month notes, half the 6.504 percent it paid in November.
But some analysts suggested that European banks making use of low-cost European Central Bank money were largely behind the auction's success.
Sentiment soured as yields on 10-year Italian bonds jumped to a painful 6.9 percent later in a topsy-turvey day, raising worries about Rome's plans to sell longer-term bonds on Thursday.
This week's auctions are being seen as a bellwether for market sentiment on Italy -- the eurozone's third largest economy -- but also for the euro area at the end of a year that has raised serious questions about the future of the project.
"Investors' euro-sentiment is so bad, and it's getting even worse," Daiwa SB Investments senior fund manager Kenichiro Ikezawa told Dow Jones Newswires, adding market players will focus on the auction of Italy's 10-year bonds.
"Since the 10-year tender results have been somewhat poor lately, the euro may reverse its course if the outcome turns out to be positive," Ikezawa added.
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