The yen dropped versus the euro and the dollar on Tuesday as speculation mounted about a possible rescue of Greece and other heavily indebted southern European countries. The dollar and yen tend to remain closely tied to investors' appetite for risky assets and swings in equity markets, with the yen tending to lose more often when investors snap up stocks, commodities and other assets perceived as risky.
The euro extended gains in midday trading as various media reports pointed to German officials working on a rescue package for Greece. The plan may include loan guarantees for Greece and other deficit-laden countries, according to The Wall Street Journal.
Earlier during Asian sesion,news that European Central Bank President Jean-Claude Trichet planned to fly back from Australia earlier than scheduled to attend a Thursday meeting of European Union leaders may be working toward some sort of plan to shore up debt-burdened countries.
EURJPY was on the uptrend since Asian opening with a reaction on early New York session that found support at 61.8 retracement. It moved from 122.00 to 124.00 by the end of Tuesday session.
