TOKYO ? The dollar stayed weak against the euro and other major currencies in Asia on Thursday, dragged down by renewed concerns over the US economy, dealers said.

The euro rose to $1.2332 in Tokyo morning trade from $1.2320 in New York late Wednesday, and to 110.87 yen from 110.62.

The greenback was quoted at 89.88 yen, in line with levels in New York where it fell with investors fretting over the Federal Reserve's gloomy prognosis for the world's largest economy.

The Federal Open Market Committee said Wednesday it was maintaining its federal funds rate target between zero and 0.25 percent as widely expected, but it also warned Europe's fiscal problems were taking a toll.

"Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad," the committee said.

The euro rose on buying from Asian short-term funds as recent weak US economic data pushed US Treasury yields lower, decreasing attractiveness of holding the greenback, said a dealer at a major Japanese bank.

The dollar-yen trade was calm as it "has already fallen to a reasonable level," the dealer said.

Investors were spooked by new signs of weakness in the US recovery shown in housing and other data.

A report from the Commerce Department showed that sales of new homes in the United States plunged to a record low in May after the expiration of a home-buyer tax credit.

The Commerce Department said sales dropped 32.7 percent from April to a seasonally adjusted annual rate of 300,000, the slowest pace since records began in January 1963.

And it was well below a drop to 430,000 expected by most analysts after the end of the federal tax incentive aimed at underpinning the embattled housing market as the economy struggles to recover from the worst recession in decades.

China's central bank left its yuan exchange rate basically unchanged on Thursday following its weekend vow to let the currency trade more freely amid mounting US pressure.

The People's Bank of China set the central parity rate ? the centre point of the currency's allowed trading band ? at 6.8100 to the dollar, only slightly stronger than Wednesday's 6.8102.

Policymakers promised at the weekend to let the yuan trade more freely against the dollar but ruled out any dramatic shifts in the currency or a one-off adjustment in its value.