TOKYO - The dollar was close to a six-week high against the yen and a three-month peak versus the euro in Asia Thursday as worries mounted about the woes of the Japanese and European economies.
The dollar rose to 93.81 yen in Tokyo morning trade from 93.72 in New York late on Wednesday, to levels last seen in early January.
"The yen is rapidly losing its 'safe haven' status thanks to Japan’s gross domestic product slumping at twice the pace of the other major economies," said NAB Capital analyst John Kyriakopoulos.
The yen rose sharply after the global financial crisis erupted because it was seen as a less risky bet than other major currencies.
But after Japan's economy suffered its worst quarterly contraction since 1974 and its government was rocked by the resignation of the finance minister, the yen appears to be losing some of its appeal, dealers said.
The dollar got a boost after US President Barack Obama on Wednesday announced a $275-billion housing bailout that would help up to nine million people refinance their mortgages.
The euro meanwhile has been wounded by growing concerns about the health of the eurozone economy and its vulnerability to the troubles of Eastern Europe.
The euro was at 1.2580 dollars, after sinking to 1.2513 on Wednesday, the lowest point since November 21. The euro rose to 117.80 yen from 117.45.
Markets were eyeing a meeting between German Chancellor Angela Merkel and EU Commission President Jose Manuel Barroso later in the day, amid speculation Berlin may unveil measures to help other European economies.
"I think Merkel will announce something positive, which may be a factor to support the euro," said Societe Generale chief forex strategist Yuji Saito.
"However, given the risks facing the Eastern European economies, if Berlin does decide to support them, that will weigh on (Germany's) finances. There is no silver bullet," he added.
Spain and Ireland last month had their debt ratings slashed, while there is concern European countries may be the next in line.
Markets were also waiting for a Bank of Japan policy decision meeting later in the day. Investors expect interest rates to be left on hold at 0.1 percent, with attention focused on the central bank's efforts to help companies gain access to vital credit flows.