Euro weakens in Asian trade on Cyprus, Italy worries

TOKYO: The dollar and euro weakened on the yen in Asia Monday amid concerns over debt-ravaged Cyprus and political uncertainty in Italy as a Bank of Japan survey showed a modest increase in business confidence.

Euro-sentiment was dampened after a rough week in which Cyprus managed to open its banks as the first step in what will be a gruelling economic and financial rehabilitation programme.

In morning Tokyo trade, the dollar weakened to 93.89 yen against 94.20 yen in Easter weekend trade on Friday in New York.

The euro bought $1.2777 and 119.98 yen, slipping from $1.2818 and 120.78 yen in US trading, as the Cyprus bailout and Italian political instability heaped caution on trading of the common currency.

The coming week sees monetary policy meetings by the Bank of Japan (BoJ), the European Central Bank (ECB) and Bank of England.

Markets will be watching to see if ECB chief Mario Draghi tries to calm markets when he holds his regular monthly news briefing Thursday, although bank watchers said the ECB was likely to hold off any new policy measures.