* Greek fiscal woes hurt euro after S&P comments
* Yen hits 3-week high vs dollar, 1-year high vs euro
* U.S. jobless claims rise unexpectedly in latest week
(Adds details, comment, updates prices)
By Wanfeng Zhou
NEW YORK, Feb 25 (Reuters) - The dollar and euro fell
against the yen on Thursday as worries about the Greek debt
crisis and an unexpected rise in U.S. initial jobless claims
boosted safe-haven flows into the Japanese currency.
The euro earlier neared a nine-month low against the dollar
and hit a one-year low versus the yen as worries about Greece
intensified after ratings agency Standard and Poor's said late
on Wednesday it may cut Greece's rating by one or two notches
within a month. []
Investors' appetite for risk fell further after U.S. data
showing first-time filings for unemployment benefits
unexpectedly rose in the latest week, fuelling concern about
the labor market. See []
"The yen has strengthened through Asian and European
trading. Sovereign risk fears and the threats of a downgrade of
Greece has definitely had an impact," said Sacha Tihanyi,
currency strategist at Scotia Capital in Toronto.
"The initial jobless claims data has really helped to push
more of a U.S.-centric feeling of risk aversion," he added.
"Once we saw that data come out around 8:30 a.m., dollar/yen
dropped quite rapidly."
In mid-morning trading, the dollar dropped to a low of
88.95 yen <JPY=>, its lowest in about three weeks, according to
Reuters data. It was last at 89.05 yen, down 1.3 percent.
The euro fell as low as $1.3452, near a nine-month low of
$1.3442 hit on Friday, according to Reuters data. It last
traded at $1.3504, down 0.2 percent.
Among other ratings agencies, Moody's Investors Service
told Reuters on Thursday any changes in its ratings on Greece
would depend on whether Athens delivered on its fiscal reform
plans See [].
Fitch Ratings expects to keep Greece's BBB+ rating
unchanged for the next few months barring surprises and is
maintaining its negative outlook. See []
The spread between Greek and German 10-year government
bonds widened, and the cost of insuring Greek debt against
default also rose [].
HIGH-YIELDERS TUMBLE
Concerns over Greece and other peripheral euro zone
countries' ability to pay their debts have driven the euro down
more than 10 percent versus the dollar from its December
highs.
EU inspectors visiting Athens have told authorities they
see a deeper than expected recession and higher borrowing costs
hindering Greece in meeting its deficit-cutting targets. See
[]
The inspectors anticipate Greece will only be able to cut
its deficit-to-GDP ratio by 1.5-2.0 percentage points compared
with a 4 percentage points target this year.
Against the yen, the euro traded as low as 119.77 yen
<EURJPY=>, the lowest since February, 2009, according to
Reuters data. It was last at 120.28 yen, down 1.4 percent on
the day.
"We are likely to see the single-currency trend lower going
into the following month as risk trends continue to dictate
price action in the forex market," said David Song, currency
analyst at DailyFX.com in New York.
Analysts said the yen is likely to remain in favor going
into the Japanese fiscal year-end. Japanese corporates
traditionally repatriated overseas' revenues back to their
domestic currency ahead of the financial year close on March
31.
Higher-yielding currencies such as the Australian and New
Zealand dollars also came under heavy pressure.
The Australian dollar fell 1.2 percent to US$0.8824 <AUD=>
and was down 2.4 percent at 78.55 yen <AUDJPY=R>. The New
Zealand dollar dropped 0.7 percent to US$0.6877 <NZD=>.
(Editing by Chizu Nomiyama)
