Summary The dollar was lower against other Asia-Pacific currencies.
TOKYO (AFP) - The euro climbed in Asia Thursday after a bid to topple Italy s government fell apart, while the dollar struggled as the US budget impasse heightened fears of a catastrophic debt default.
The European single currency bought $1.3609 in late Tokyo afternoon trade, from $1.3580 in New York where it hit an eight-month high against the dollar.
The euro was also stronger against the yen, at 133.16 yen from 132.21.
Bucking its downward trend against other Asia-Pacific currencies, the dollar climbed to 97.83 yen, from 97.34 yen in US trade.
But "the overall sentiment is to sell the dollar on the back of the partial US government shutdown," one trader said.
The euro jumped after former Italian prime minister Silvio Berlusconi abandoned his bid to topple Enrico Letta s government, in a humiliating climbdown after key allies rebelled against his leadership.
The move averted a political crisis and restored a measure of stability in a nation struggling to put its public finances in order.
As the Bank of Japan kicked off a two-day policy meeting, the European Central Bank on Wednesday held key rates at all-time lows of 0.50 percent while it promised to do everything possible to prevent tightening market conditions from choking off a recovery.
"The eurozone recovery is expected to continue, which lowers the risk for (the ECB) to consider a more aggressive monetary policy stance in the very short-term," Credit Agricole said.
Further monetary easing would tend to weigh on the euro.
In the US, talks between President Barack Obama and top Republicans failed to end a government shutdown Wednesday, ensuring that the United States heads into a third day of a dramatic government spending freeze, with no end in sight and the world s biggest economy in peril.
Obama has warned that the political crisis over a budget row could see the US default on its debt, as weak US payrolls data Wednesday added to the gloom.
Dealers were also keeping a close eye on the BoJ s policy meeting, which wraps up Friday, to see if it expands its asset-buying programme after Tokyo said it would raise sales taxes. Some fear that will derail Japan s economic recovery.
The dollar was lower against other Asia-Pacific currencies.
It slipped to 61.87 Indian rupees from 62.46 rupees the previous day, to Sg$1.2497 from Sg$1.2533, to 31.24 Thai baht from 31.31 baht, to 43.11 Philippine pesos from 43.41 pesos, and to 11,297 Indonesian rupiah from 11,565 rupiah.
It also sank to Tw$29.39 from Tw$29.49 and to 1,069.66 South Korean won from 1,074.30 won.
The Australian dollar firmed to 93.82 US cents from 93.69 cents, while the Chinese yuan edged up to 15.98 yen from 15.94 yen.
