Euro weakens in Asia ahead of EU summit

TOKYO: The euro weakened in Asia on Monday as traders looked for safer assets amid concern ahead of a European Union summit this week in which leaders will try to agree a plan to address the continent's debt woes.

The euro bought $1.2535 and 100.66 yen in Tokyo morning trade, down from $1.2569 and 101.10 yen in New York late Friday.

The dollar was trading at 80.32 yen against 80.43 yen.

Investor caution was stoked partly by Moody's downgrade of 15 global financial institutions' credit ratings last week, said a senior dealer at a major bank in Tokyo.

Europe's leaders gather at the summit in Brussels on Thursday and Friday under intense global pressure to contain the region's debt crisis, and head off a potentially catastrophic economic collapse.

The talks, which are aimed at working out a roadmap for tighter European integration, are likely to disappoint overall, said Standard Chartered.

"We do not expect anything which will soothe the renewed sovereign debt tensions -- in particular over Spain and Italy," the bank said in a note.

Optimism quickly faded over a deal Friday in which the leaders of the eurozone's four top economies vowed new measures to support growth by mobilising up to 130 billion euros ($163 billion).

A deadline for banks to comply with a European Banking Authority directive to come up with another 115 billion euros to meet new capital adequacy rules is also looming this week, it added.