Following concerns that Italy’s economy has shrunk, the euro fell against the yen in Tuesday’s Asian session, falling 0.4 percent to 121.24 yen. Italy’s woes continue to weigh on the euro, specifically after the country fell deep into a political deadlock as former Prime Minister Silvio Berlusconi emerged with an anti-austerity platform and Beppe Grillo surprised political pundits with the popularity of his anti-euro platform, with more than 25 percent of the vote.
Italy, Germany and France are due to report their monthly purchasing manager index figures for service industries later today, and investors are not confident in the results of such reports. Later this week the central bank will update its December economic forecasts, and analysts are predicting a very weak number for the overall European GDP.
In Asia, the yen strengthened against most major currencies after testimonies to the Bank of Japan were unable to show signs of a further economic stimulus. Among the yen’s gains was a 0.6 percent rise against the dollar, to 92.94 yen.