TOKYO: The euro lost further ground in Asia on Tuesday, as Asian equity markets followed plunges in Europe due to worries about the fragile global economy and renewed fears over Greek sovereign debt.
The single currency fell to $1.4057 in Tokyo trade from $1.4109 in London late Monday. The European single unit also weakened to nearly a six-month low of 107.96 yen from 108.57 yen.
As investors fled to the safe haven Japanese currency, the euro dropped below 108 yen for the first time since March 17, shortly after the massive earthquake and tsunami devastated eastern Japan on March 11.
The dollar was flat at 76.80 yen compared to 76.86 yen. The US markets were closed Monday for the Labor Day holiday.
Investors also fled to the safe haven Swiss Franc. The dollar was at 0.7846 Swiss Francs from 0.7870. The euro fetched 1.1019 francs from 1.1074.
European stocks plummeted Monday. Bonds issued by Greece and Italy fell, and the cost of insuring against default by Italy and France, as indicated by the market for credit default swap (CDS) instruments, rose sharply.
The head of the European Central Bank, Jean-Claude Trichet, warned Monday of an immediate and imperative need for enactment of a second debt rescue for Greece, and for tightened discipline in the management of eurozone economies.
"Investors are suspicious and jittery as fears (concerning the European sovereign debt crisis) spread," said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.
"An economic slowdown has been reconfirmed not only in the United States but also in Europe. Together with the long-term problem of sovereign debts, faded expectation for an ECB rate hike is weighing on the euro," Kamei said.
The European Central Bank is due to hold a policy meeting on Thursday.
