Euro slips in Asia after S&P cuts Spain rating

TOKYO: The euro weakened in Asia on Thursday after Standard & Poor's cut Spain's sovereign debt rating, while traders also had an eye on a meeting of the Group of Seven major economies in Tokyo. The European common currency was changing hands at $1.2840 in Tokyo morning trade against $1.2887 in New York late Wednesday, while it fell to 100.26 yen from 100.74 yen. The dollar declined to 78.06 yen against 78.18 yen. Standard & Poor's slashed Spain's rating late Wednesday by two notches to just above junk level, citing a deepening recession and strains from the country's troubled banks. "The news caught the market off guard as we were focused on possible rating action by Moody's," Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust Bank, told Dow Jones Newswires. A senior dealer at a Japanese bank said: "The focus is on whether London players will react to the S&P news again when they come to the market later in the day." Also in Tokyo finance ministers and central bankers from the G7 are to hold talks later in the day on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in Tokyo. They are expected to discuss the plodding global economy as well as the yen's ongoing strength, which is hammering Japan's economy.