Euro firms in Asia after Merkel's comments

TOKYO: The euro strengthened in Asian trade Friday after German Chancellor Angela Merkel's supportive comments for the European Central Bank (ECB) and the embattled currency helped boost it.

The euro bought $1.2361 and 98.08 yen in Tokyo, up slightly from $1.2358 and 98.06 yen in New York late Thursday.

The dollar gained against the Japanese currency, edging higher to 79.37 yen from 79.33 yen in US trade.

On a visit to Ottawa, Merkel offered solid support for the European Central Bank and appeared to back ECB President Mario Draghi's vow to do everything possible to preserve Europe's common currency.

Some traders saw the comments as evidence Merkel was warming to the idea of the ECB buying the debt of troubled eurozone countries if they meet tough conditions.

The dollar won some support from new US economic data.

Weekly numbers for new unemployment insurance claims, an indicator of the pace of layoffs, came in as expected and in the same range as the past four months, while July data on new housing construction, although slightly down from June, suggested the hard-hit sector was steadily picking up pace.

The greenback may test the 80 yen level on easing worries about the world's largest economy and as long-term US Treasury yields rise, said Masafumi Yamamoto, chief forex strategist at Barclays Bank in Tokyo.

Markets would now turn their attention to University of Michigan consumer sentiment data due later in the day, dealers said. (AFP)