Investing.com – The euro erased losses against the yen on Tuesday, rebounding from a four-day low after an auction of Spanish government debt met with strong investor demand, soothing concerns that the indebted nation will need a bailout.
EUR/JPY clawed back up from 118.48, the pair’s lowest since April 20 to hit 119.55 during European afternoon trade, gaining 0.21%.
The pair was likely to find support at 118.25, the low of April 19 and short-term resistance at 120.38, the high of April 20.
Spain’s Treasury sold EUR1.97 billion of the short-term bills with the average three-month yield jumping to 1.37% compared to 0.89% in March and six-month rates to 1.86% from 1.36%.
Speculation that Greece may have to restructure its debt, denied by officials, and talks on the euro zone's third bailout in a year in Portugal have pushed up Spain's refinancing costs and fuelled concerns it may be next.
Meanwhile, the euro was lower against the Swiss franc, with EUR/CHF slipping 0.10% to hit 1.2833.
Earlier in the day, European Central Bank President Jean-Claude Trichet warned that policy makers must avert any jump in inflation expectations amid the risk of higher prices spreading through the economy.
Mr. Trichet said that “it is extremely important to continue solidly anchoring inflation expectations in a period which is marked by uncertainties and turbulences.”
EUR/JPY clawed back up from 118.48, the pair’s lowest since April 20 to hit 119.55 during European afternoon trade, gaining 0.21%.
The pair was likely to find support at 118.25, the low of April 19 and short-term resistance at 120.38, the high of April 20.
Spain’s Treasury sold EUR1.97 billion of the short-term bills with the average three-month yield jumping to 1.37% compared to 0.89% in March and six-month rates to 1.86% from 1.36%.
Speculation that Greece may have to restructure its debt, denied by officials, and talks on the euro zone's third bailout in a year in Portugal have pushed up Spain's refinancing costs and fuelled concerns it may be next.
Meanwhile, the euro was lower against the Swiss franc, with EUR/CHF slipping 0.10% to hit 1.2833.
Earlier in the day, European Central Bank President Jean-Claude Trichet warned that policy makers must avert any jump in inflation expectations amid the risk of higher prices spreading through the economy.
Mr. Trichet said that “it is extremely important to continue solidly anchoring inflation expectations in a period which is marked by uncertainties and turbulences.”