EUR/JPY May Fall Back On Europe Debt Woes

(Tue, Feb 09, 2010) EUR/JPY rising as Asia short-term investors buying back with Shanghai stocks climbing, but pair may reverse course soon amid lingering sovereign debt worries in euro-zone nations, says Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

Notes many traders believe European Union, slated to hold summit on Thursday, may fail to offer details on how to deal with fiscal crisis in Greece, Spain and Portugal; that could raise skepticism about European economy, drag down European share prices, making more players reluctant to take risks, rekindling demand for safe-haven JPY.

"It's very difficult to dabble in risky assets for now. Unless the European fiscal problems show signs of being solved, many investors may remain eager to buy the yen versus EUR.” EUR/JPY last 122.42 vs session low 121.62.