Euro Steady in Asia despite Spain Downgrade

The euro was steady in Asian trade Thursday despite a credit rating downgrade of Spain as markets look to weekend Greek elections seen as pivotal to the country's future in the Eurozone.

The single currency bought $1.2569 in Tokyo morning trade, compared with $1.2557 in New York late Wednesday, while it was little changed at 99.74 yen, from 99.78 yen.

The dollar changed hands at 79.42 yen against 79.46 yen, with the greenback under pressure following weak U.S. retail sales data -- the latest in a string of underwhelming economic figures for the world's largest economy.

"The fact is everyone is waiting for the weekend's Greek election," National Australia Bank said in a note.

"We've had Moody's downgrading Spain's sovereign rating by three notches... Currency markets have been virtually unmoved in response," the bank added.

The agency downgraded Spain on Wednesday, just days after the Eurozone agreed to lend Madrid 100 billion euros to shore up its troubled banking sector -- a move Moody's said would add to the nation's already sizeable debt.

Greece, meanwhile, holds its second parliamentary election in less than two months on Sunday, polls viewed as a referendum on its future in the 17-nation Eurozone.

The leftist Syriza party, which has pledged to tear up an unpopular bailout deal with the European Union and International Monetary Fund, appears set for a strong showing.

Even parties that backed the rescue now favor renegotiating its terms, which could make Greece's exit from the Eurozone more likely, dealers said.

However, in a Financial Times commentary, Syriza head Alexis Tsipras said his party was committed to keeping Greece in the euro.

French President Francois Hollande warned Wednesday if Athens does not keep its bailout commitments, some Eurozone partners will want it out of the bloc.

Markets were also keeping an eye on the Bank of Japan which will wrap up a two-day policy meeting Friday.

The bank will likely maintain the size of its 70 trillion yen asset-purchase program while also keeping interest rates between zero and 0.1 percent, according to nine of 11 economists polled by Dow Jones Newswires.