Euro weakens in Asian trade

TOKYO: The euro weakened in Asian trade Friday after hopes were dashed for US policy easing to pump up the world's biggest economy, while a Spanish credit rating downgrade had limited impact on the unit.

The euro fetched $1.2525 and 99.47 yen in Tokyo morning trade, down from $1.2561 and 100.01 yen late Thursday in New York.

The dollar bought 79.41 yen against 79.58 yen in New York, as Japan revised upward its January to March economic growth figures, but warned that soaring energy costs were taking a toll.

Fed chairman Ben Bernanke, in testimony to Congress on Thursday, was fairly upbeat about "moderate" growth in the US economy and gave no hint of fresh stimulus measures.

Also Thursday, China's first first interest rate cut in more than three years underscored worries about slowing in the world's number-two economy.

"Rather than be enthusiastic about China's easing, markets are aware of the fine line China treads, and worry about just how soft the economy is," National Australia Bank said in a note.

"This doesn't allow a risk rally on China's easing, but more caution instead."

Europe's progress on resolving its fiscal crisis was not happening as quickly as markets would like amid growing international calls for action, the bank said, adding that a summit later this month could prove "disappointing."

Adding to eurozone concerns, Fitch Ratings on Thursday slashed Spain's sovereign credit rating by three notches, citing ballooning estimates of the cost of a banking crisis, mushrooming debt and deepening recession.