TOKYO: The euro strengthened against the dollar in Asia on Thursday after tumbling to a four-month low on rising concern over the eurozone's fiscal woes as debt-hit Greece gets set for fresh elections.
The single currency, which fell below $1.27 on Wednesday to hit its lowest level since mid-January, bought $1.2745 and 102.34 yen in Tokyo morning trade, up from $1.2715 and 102.13 yen in New York late Wednesday.
On Wednesday, the single currency fell to $1.2681 at one stage, its lowest against the greenback since January 16, while it also tumbled below 102 yen.
On Thursday, the dollar was changing hands at 80.26 yen against 80.32 yen, after official data showed Japan's economy grew by 1.0 percent in the January to March quarter from the previous three months.
The euro was slightly higher on short covering as a mixed picture on Asian markets improved risk sentiment after world stock exchanges tumbled Wednesday, said Junichi Ishikawa, forex analyst at IG Market Securities in Tokyo.
"Investors are adjusting their positions after the long streak of euro weakness," he told Dow Jones Newswires.
Ishikawa said the euro "has been slightly oversold" but still expected weakness in the common currency over the longer term.
Tokyo share prices were sluggish Thursday morning but Hong Kong and Shanghai shares rose, defying concerns over Greece's future in the eurozone.
Christopher Vecchio, currency Analyst at DailyFX, said: "With the eurozone backdrop very much in place now, volatility is here to stay, and rallies should be capped by $1.2800 (in euro/dollar trade)."
Greece on Wednesday swore in a senior judge as caretaker prime minister who is charged with holding new elections after an indecisive vote. (AFP)