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Euro under pressure in Asian trading

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(Globalpost/GlobalPost)

The euro was under pressure in Asian trading Tuesday on the back of rising concerns about eurozone stability and warnings from another European official that the surging unit may be overheating.

The single currency fetched 124.63 yen and $1.3494 in Tokyo morning trade, against 124.28 yen and $1.3503 in New York on Monday.

The greenback gained at 92.35 yen from 92.11 yen in US trading.

Concerns over political uncertainty in Italy and Spain pressured euro-dollar trade, with investors watching to see if it breaks below the $1.34 level, said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

"If support is maintained, we could see risk appetite returning on confidence in the eurozone's economic recovery," Ishikawa told Dow Jones Newswires.

Markets were jolted after Spanish Prime Minister Mariano Rajoy was pressured to resign amid a growing corruption scandal, while in Italy, the party of former prime minister Silvio Berlusconi showed solid gains in polls ahead of national elections later this month.

Selling pressure was also stoked after French Finance Minister Pierre Moscovici said Sunday the euro was "perhaps too strong in some regards".

The minister later told AFP that he was not seeking to "launch an offensive" to drive down the euro, but added "it seems completely legitimate to me that there be a debate on the question of proper global exchange rates in international forums".

The resurgent currency on Friday soared above $1.36 and hit its highest level against the dollar since mid-November 2011, as a key US jobs report reinforced expectations that the Federal Reserve will maintain its ultra-loose monetary policy for the foreseeable future.

Last month, Jean-Claude Juncker, outgoing head of the eurozone finance ministers' group, warned that the euro's value was "dangerously high" as it threatens the competitiveness of European exports.

Tokyo has fallen under criticism that it was orchestrating a devaluation of the yen -- which has been on a steep slide in recent months -- that risked setting off a global currency war. Japan officials have repeatedly denied those claims.

Developments in Europe offered up "a good opportunity for profit-taking and led to buybacks of the yen", Bill Diviney of Barclays Capital said in a note.

Markets were also keeping an eye on a European Central Bank policy meeting this week, although many analysts expect the central bank to hold off any new policy moves.

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http://www.globalpost.com/dispatch/news/afp/130204/euro-under-pressure-asian-trading