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Euro gains vs. dollar, yen in morning on report China will buy Portugal bonds.

TOKYO, May 26 Kyodo

The euro strengthened against both the dollar and the yen Thursday morning in Tokyo on a report that China plans to buy Portuguese bailout bonds, at a time when European sovereign debt woes weigh on the single currency.

At noon, the euro traded at $1.4160-4162 and 115.93-95 yen against $1.4083-4093 and 115.40-50 yen in New York and $1.4037-4039 and 115.22-26 yen in Tokyo at 5 p.m. Wednesday.

The dollar fetched 81.86-89 yen versus 81.91-82.01 yen in New York and 82.08-10 yen in Tokyo late Wednesday.

The euro gained ground after The Financial Times reported Thursday that Asian investors including the Chinese government are expected to be significant buyers of Portuguese bailout bonds when their auctions are held next month, dealers said.

''The news came at a time when the euro was inching back from recent falls on rekindled concerns over eurozone debt problems, including the possibility of Greece leaving the eurozone,'' a senior dealer at a major Japanese bank said.

The single currency also drew buying on news that Wang Yong, a professor at the People's Bank of China's training institute, said in a Chinese daily that China should expand its purchases of eurozone sovereign debt and should increase direct investment in Europe, they said.

The dollar, meanwhile, fell slightly against the yen as crude oil and gold were bought but generally stayed in a tight range due to a lack of major trading cues, the dealer said.
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Publication:Japan Weekly Monitor
Geographic Code:9CHIN
Date:May 31, 2011
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