Euro falls further against dollar

TOKYO: The euro lost further ground against the dollar in Asia on Wednesday after a spike in Italy's borrowing costs stoked investor concerns over Europe's debt crisis.

The euro fell to $1.3506 and 104.05 yen in Tokyo trade from $1.3536 and 104.31 yen in New York late Tuesday.

The dollar was flat at 77.07 yen compared with 77.05 yen.

Investors kept a wary eye on Europe after hikes in borrowing costs for Italy, Spain and France.

Italy's 10-year cost of borrowing jumped back above the 7.0 percent level seen as unsustainable for the country to service its debt as prime minister designate Mario Monti vowed to unveil a new government Wednesday.

Spain paid sharply higher rates of more than 5.0 percent on a new 3.16-billion-euro Spanish Treasury auction of 12 and 18-month bills, reflecting concerns that the country could be the next to seek a bailout.

And the rate on the French 10-year bond rose sharply to 3.683 percent, making Paris pay more than twice as much as Germany to borrow. (AFP)