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Euro falls against dollar

Tokyo - The euro retreated in Asian trade on Friday, as risk appetite waned amid ongoing concerns over European debt and following losses in Tokyo stocks and oil prices, dealers said.

The euro sagged to $1.4193 in the morning, from $1.4244 in New York late on Thursday. The single European currency also fell to ¥114.89 from ¥115.27 while the dollar inched down to ¥80.92, compared with ¥80.95.

Dealers sold the European single currency as they fretted over the outlook for eurozone sovereign debt as Greece, which has already been bailed out, continues to struggle.

The euro bounced back overnight on risk appetite helped by rises in oil and US equities, as the International Monetary Fund said it is willing to consider giving Greece more time to repay its bailout loan of €30bn.

But falling shares in Tokyo and crude prices sent investors running again.

In afternoon trade the Nikkei stock index was down 1.29% while oil edged down after a rally late in New York on Thursday, sending dealers into the safer haven yen.

A top IMF official said on Thursday that the latest aid review did not point to Greece having to restructure its debt, noting the country had assets worth several hundred billion euros, which it could sell.

The next IMF review of Greek aid is due in June but "at this point, on the basis of our programme, we think that Greece should be moving in the right direction to a position where its debt is sustainable," said Antonio Borge, the IMF director for Europe.

It "therefore does not require restructuring," he said.

Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ, said: "No one actively chased the euro higher as its weak undertone remains unchanged." She added that eurozone debt fears continue to cast shadow.

Concerns that Greece, which has seen its debt rating lowered to "junk", would restructure its loan repayments led one senior European official to say it would put the nation's banking system "on its knees".

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