The euro hit a record high against the yen today and remained within striking distance of this week's all-time peak versus the dollar.
The single currency rose above 141.60 yen in thin Tokyo trade, extending Wednesday's gains on technical moves and on concerns that Sunday's devastating tsunami that has killed over 85,000 people around the Indian Ocean could hurt economic growth throughout Asia.
"I think the tragic events that have occurred over the past few days in Southeast Asia may be having an impact on the yen," said Kamal Sharma, foreign exchange strategist at Dresdner Kleinwort Wasserstein.
"There's some investor uncertainty of what the implications for regional growth in that area will be and that's weighing on yen sentiment," he added.
By mid morning the euro stood at 141.20 yen, slightly higher compared with late Wednesday levels in New York, while the dollar was steady at 103.76 yen.
The euro stood at $1.3606 against the dollar, virtually unchanged on the day but close to a record high of $1.3647 set in the previous session.
Sterling recovered a little from Wednesday's 14-month low against the euro after better-than-expected consumer confidence and housing market data.
The euro was unruffled by comments from German Chancellor Gerhard Schroeder, who said in a newspaper article that persistent US dollar weakness is a concern and stability in foreign exchange markets requires a correction of global economic imbalances.
Traders and investors expect the dollar's three-year decline against other major currencies to stretch into a fourth year in 2005 due to long-standing concerns about the United States' ability to attract enough investment to narrow its record current account deficit.