Investing.com - The euro was sharply lower against the yen on Monday, as market sentiment was hit after European leaders failed to convince investors that progress was made in tackling the region’s debt crisis at last week’s summit.
EUR/JPY hit 103.10 during European afternoon trade, the pair’s lowest since December 8; the pair subsequently consolidated at 103.26, declining 0.61%.
The pair was likely to find support at 102.48, the low of November 25 and resistance at 104.39, the high of December 9.
European Union leaders agreed to draft a new treaty to implement tighter fiscal consolidation across the euro zone and to provide EUR200 billion in loans to the International Monetary Fund to assist countries with debt problems.
But investors remained unsure over whether the measures would go far enough to tackle the region’s debt crisis after the European Central Bank indicated that it had no plans to increase its bond purchasing program, capping weekly bond purchases at EUR20 billion.
Earlier Monday, Standard & Poor’s chief European economist said Friday’s agreement was a significant step in resolving a "crisis of confidence,” but warned that time is running out and more action is needed.
The comments came after S&P placed the credit ratings of 15 euro zone members, including France and Germany, on watch for a potential downgrade last week.
Sentiment was also hit after Moody’s said it will review the ratings of all EU countries in the first quarter, saying Friday’s summit failed to deliver “decisive policy measures” to end the region’s debt crisis.
Elsewhere, the yen was lower against the U.S. dollar with USD/JPY rising 0.42%, to trade at 77.95.
Later in the day, the U.S. was to publish official data on the federal budget balance.
Also Monday, Italy’s Treasury sold the full targeted amount of EUR7 billion of 12-month government bonds at an average yield of 5.95% compared to 6.08% at a bond auction last month.
Following the auction, the yield on Italian 10-year government bonds climbed back towards the near unsustainable levels hit last month, rising to 7.18%.
EUR/JPY hit 103.10 during European afternoon trade, the pair’s lowest since December 8; the pair subsequently consolidated at 103.26, declining 0.61%.
The pair was likely to find support at 102.48, the low of November 25 and resistance at 104.39, the high of December 9.
European Union leaders agreed to draft a new treaty to implement tighter fiscal consolidation across the euro zone and to provide EUR200 billion in loans to the International Monetary Fund to assist countries with debt problems.
But investors remained unsure over whether the measures would go far enough to tackle the region’s debt crisis after the European Central Bank indicated that it had no plans to increase its bond purchasing program, capping weekly bond purchases at EUR20 billion.
Earlier Monday, Standard & Poor’s chief European economist said Friday’s agreement was a significant step in resolving a "crisis of confidence,” but warned that time is running out and more action is needed.
The comments came after S&P placed the credit ratings of 15 euro zone members, including France and Germany, on watch for a potential downgrade last week.
Sentiment was also hit after Moody’s said it will review the ratings of all EU countries in the first quarter, saying Friday’s summit failed to deliver “decisive policy measures” to end the region’s debt crisis.
Elsewhere, the yen was lower against the U.S. dollar with USD/JPY rising 0.42%, to trade at 77.95.
Later in the day, the U.S. was to publish official data on the federal budget balance.
Also Monday, Italy’s Treasury sold the full targeted amount of EUR7 billion of 12-month government bonds at an average yield of 5.95% compared to 6.08% at a bond auction last month.
Following the auction, the yield on Italian 10-year government bonds climbed back towards the near unsustainable levels hit last month, rising to 7.18%.