The euro eased in Asian trade on Tuesday as currency markets digested a list of bad news for the eurozone while also harbouring doubts about a European Union summit this week.
The single currency gave up its morning gains against the yen and dollar to stand at $1.2500 from $1.2502 late Monday in New York, while buying 99.49 yen from 99.58 yen in US trade. The unit is well down from levels around $1.2540 and 100.60 yen in Asia on Monday.
The dollar was slightly weaker at 79.60 yen from 79.64 yen in New York.
Euro-selling was stoked by a decision by ratings agency Moody's to downgrade 28 Spanish banks Monday, saying they faced rising losses from commercial real estate loans.
The cuts came on the same day that Madrid formally requested a rescue loan of up to 100 billion euros for the banking sector from its eurozone partners.
Dealers were already nervous ahead of a two-day summit at the end of the week that aims to address Europe's debt crisis, with most holding low expectations that anything concrete will emerge.
Also Monday Cyprus became the latest country to request aid from the eurozone's bailout fund, reflecting the bloc's worsening economy, said Credit Suisse analyst Hiromichi Shirakawa.
"We should pay attention to risks that a country in eastern or central Europe may fall into a crisis," he said in a note.
Currency traders were also watching Japan for a vote on controversial new tax and social security legislation with Prime Minister Yoshihiko Noda facing a rebellion within his own party that threatened to bring down the government.
A plan to double Japan's consumption tax to 10.0 percent in a bid to shrink the nation's massive public debt passed in the parliamentary vote Tuesday afternoon.
But more than 50 ruling-party members, led by one-time powerbroker Ichiro Ozawa, voted against the rise with some threatening to create a breakaway party.
The dollar was mixed against other Asia-Pacific currencies.
It rose to Sg$1.2816 from Sg$1.2814 a day earlier, to Tw$29.96 from Tw$29.95, and to 57.03 Indian rupees from 56.51 rupees.
But the greenback weakened to 1,159.18 South Korean won from 1,160.90 won, to 42.54 Philippine pesos from 42.58 pesos, to 9,485.00 Indonesian rupiah from 9,493.00 rupiah and to 31.84 Thai baht from 31.89 baht.
The Australian dollar bought US$1.0021 against US$1.0035 while the Chinese yuan changed hands at 12.49 yen, from 12.59 yen.
-- Dow Jones Newswires contributed to this article --