Summary The franc rose again to 0.9945 against the euro before settling back at 1.0012 by late afternoon.
TOKYO (AFP) - The euro struggled on Friday in Asia after plunging in reaction to Switzerland s surprise decision to remove its currency peg against the unit, sending investors fleeing for safer currencies.
Markets were blindsided Thursday when the Swiss National Bank said it would scrap its 1.20 franc link to the euro, which had been in place since the height of the European debt crisis three years ago.
The SNB had been defending the exchange rate since September 2011 in an effort to protect the country s vital export and tourism industries, even buying massive quantities of foreign currencies to do so.
More recently, the Russian ruble crisis put renewed pressure on the franc.
The news immediately sent the Swiss currency surging 30 percent to 0.8517 at one point Thursday before ending the day at 1.0035 against the euro.
In Tokyo on Friday, the franc rose again to 0.9945 against the euro before settling back at 1.0012 by late afternoon.
The announcement also sent the US dollar falling to 0.8597 against the franc from 1.0193. By late afternoon in Tokyo, the greenback recovered slightly to 0.8697.
"It s normal for (the Russian) ruble to do this kind of thing, but we re talking about Swiss franc," Axel Merk, president and founder of US-based Merk Investments, told Bloomberg News.
"That s quite extraordinary and unheard of."
The huge volatility hammered a New Zealand currency brokerage, which said it would close in the wake of the dramatic Swiss move.
"The majority of clients in a franc position were on the losing side and sustained losses amounting to far greater than their account equity," director David Johnson said in a statement dated January 15 and posted on the website of affiliated company Excel Markets.
"When a client cannot cover their losses it is passed onto us. GBL can no longer meet regulatory minimum capitalisation requirements...and will not be able to resume business."
In Asia, the yen -- seen as a safe bet in times of turmoil or uncertainty -- picked up pace in the morning with the dollar falling to 115.96 yen from 116.25 yen in New York and well down from 117.70 yen in Tokyo earlier Thursday.
However, the greenback recovered some lost ground with the unit at 116.64 yen in the afternoon.
The euro edged up to $1.1632 and 135.68 yen, against $1.1623 and 135.12 yen. But it was well down from $1.1773 and 138.64 yen Thursday before the SNB move.
Adding to pressure on the euro was the growing expectation the European Central Bank will unveil a vast bond-buying scheme next week aimed at kick-starting growth and avoiding deflation.
The dollar was mostly weaker against other Asia-Pacific currencies.
It fell to 1,076.90 South Korean won from 1,082.85 won on Thursday, to Sg$1.3238 from Sg$1.3342, to Tw$31.57 from Tw$31.74, to 32.68 Thai baht from 32.78 baht, and to 12,570.00 Indonesian rupiah from 12,605 rupiah.
The dollar rose to 61.92 Indian rupees from 61.85 rupees, while it was flat at 44.67 Philippine pesos.
The Australian dollar rose to 82.35 US cents from 82.04 cents, while the Chinese yuan fetched 18.74 yen against 19.00 yen.
