TOKYO: The euro lost more ground in Asia on Tuesday after talks between Greece and its creditors collapsed, fanning fears that the country will tumble out of the euro zone.
In Tokyo, the common currency slumped to $1.1348 and 134.35 yen from $1.1390 and 134.53 yen in London. US markets were closed Monday for a holiday.
“Greece and Germany came to the talks with different preconditions, and the lack of compromise is weighing on the euro,” Yuji Saito, director of foreign exchange at Credit Agricole SA in Tokyo, told Bloomberg News.
Damp risk sentiment also weighed on the dollar, which fetched 118.37 yen against 118.47 yen in Europe investors tend to buy the yen during times of uncertainty or turmoil.
A closely watched meeting Monday broke down without agreement on Greece’s debt after Athens refused euro zone finance ministers’ demand that it must apply for an extension to its current bailout.
0Eurogroup head Jeroen Dijsselbloem said the country had the rest of the week to make the request, with the 240 billion euro lifeline expiring at the end of the month.
But an Athens source dismissed the demand to stick to its current bailout as “absurd”.
Greece’s new far left-led government swept to power last month on a platform of overhauling the terms of the austerity laden financial aid package, which it says has hammered the economy.
Finance Minister Yanis Varoufakis is looking for a six-month bridging loan to give Greece time and financial help to negotiate a new deal.
However, the 18 other euro zone nations, led by Germany, say any changes must pass within the current program.
On Tuesday, the Bank of Japan kicked off a two-day policy meeting but few analysts expect it to announce fresh stimulus this week despite tepid growth figures published Monday.
Data showed the economy limped out of recession in the last quarter of 2014, with a weaker-than-expected 0.6 percent expansion or 2.2 percent on an annualized basis. Economists had widely expected a stronger 0.9 percent expansion on-quarter.
Over the full year the preliminary data showed zero growth, much slower than the 1.6 percent in 2013.