Euro steadies in Tokyo after earlier falls

>> Euro falls on disappointing German growth data

The single currency dipped at one point to $1.4352 in early Tokyo trade, compared with $1.4406 in New York overnight, before rebounding to $1.4405 in the afternoon.

The euro fetched 110.49 yen against 110.67 yen in New York late Tuesday and 110.41 yen in Tokyo the previous day.

France's Nicolas Sarkozy and Germany's Angela Merkel vowed to shore up economic governance in the eurozone Tuesday to restore confidence in the confidence-hit bloc, but offered little to reassure investors, said analysts.

Speaking after the talks in Paris, the leaders said they would propose an EU-wide tax on financial transactions and seek to create a eurozone governing body headed by European Union president Herman van Rompuy.

But the pair disappointed many by not backing the idea of issuing "eurobonds" to pool the debts of the 17 eurozone members, and by insisting the bloc's existing 440-billion-euro ($634 billion) bailout fund was "sufficient".

"The French-German meeting did not provide any clear solutions, and this has incited more euro selling," said Nobuyoshi Kuroiwa, senior deputy general manager at Hachijuni Bank's forex team in Tokyo.

Selling pressure on the single currency also grew overnight after the region's biggest economy, Germany, reported economic growth of just 0.1 per cent for the second quarter.

Cautious trading continued for the Swiss franc, which eased overnight after the Swiss central bank hinted the currency could be tied to the euro to stem its rise, dealers said.

Investors took a wait-and-see approach before any possible moves by the Swiss authorities to weaken the franc. The Swiss government and Swiss National Bank are expected to make announcements at any time.

The Swiss unit eased in afternoon trade, moving to 1.1522 per euro from 1.1434 in New York and 0.7998 francs per dollar against 0.7935.

The dollar changed hands at 76.68 yen early Wednesday against 76.75 yen in New York and 76.74 yen in Tokyo Tuesday.

The Japanese currency, seen as a safe-haven unit amid market turmoil, last week neared its post-World War II high of 76.25 to the dollar.

Japan intervened on forex markets in early August, selling yen and buying dollars, and has signalled that it stands ready to do so again.

"Players are looking for fresh factors before they will decide on whether to break the record," Daisuke Karakama, market economist in the forex division of Mizuho Coroprate Bank.

"It is also hard for many players to take clear positions as the market is now looking to (Federal Reserve Chairman Ben) Bernanke's highly anticipated speech on August 26," Karakama added.

The greenback was higher against other major Asian currencies, rising to Sg$1.2035 from Sg$1.2020 on Tuesday, at 1,070.81 South Korean Won from 1,048.19 and to Tw$28.93 from Tw$28.81.

The unit also gained to 8,530.75 Indonesian rupiah from 8,518.68, to 42.44 Philippine pesos from 42.30 and to 29.87 Thai baht from 29.06.