Tokyo - The euro fell on Monday after talks between Greece and its international creditors collapsed, bringing the threat of a Greek exit from the eurozone closer than ever.
The euro dropped to $1.1213 and 138.50 yen in Tokyo morning trade from $1.1260 and 138.92 yen in New York late on Friday.
The dollar firmed to 123.52 yen from 123.37 in US trade ahead of an eagerly awaited press conference Wednesday by Federal Reserve chief Janet Yellen after a two-day policy meeting.
Analysts said the euro's fall was limited as investors are still taking a wait-and-see approach to the unfolding debt drama.
“It is true that worries over the Greek exit from the euro are increasing,” said Shinya Harui, currency analyst at Nomura Securities.
But “it had already been factored into markets to a certain extent”, he told AFP.
Negotiations between Greece and its creditors broke down in less than an hour on Sunday, with both sides blaming the other's refusal to back down on certain issues.
It fanned fears that the cash-starved Greek government was heading irreversibly into the financial abyss with a huge IMF debt payment due at the end of the month.
The feeling is now stronger than ever that Greece could be heading for an exit from the euro after years of crisis.
All sides had agreed that the talks were the last chance for Athens to unlock vital bailout cash in return for tough reforms that Greece's Prime Minister Alexis Tsipras still doggedly refuses.
Nomura analyst Harui said investors were now waiting for a Thursday meeting of the eurozone's 19 finance ministers, who control the bailout purse strings.
Investors “could go into a risk-off mode and trigger sharp falls” in the euro depending on the results of the meeting, he said.
Evan Lucas, a markets strategist at IG Ltd in Melbourne, said the fact that the Sunday meeting last only 45 minutes “doesn't give you confidence a deal will be done” in time.
“This will get ugly,” he told Bloomberg News.
AFP