Tokyo - The euro fell on Wednesday after Europe slapped Greece with a deadline to submit fresh bailout reform proposals or face a eurozone exit, while a Chinese stock market rout also spooked traders, sending them into the yen.
In Tokyo, the common currency weakened to $1.0986 and 134.16 yen from $1.1007 and 134.89 yen in New York.
The dollar slipped to 122.12 yen against 122.55 yen, as investors ran to the Japanese unit, which is seen as a safe bet in times of uncertainty and turmoil.
“Greece is what's right in front of us, and personally I put the odds of a euro exit at 50:50,” said Masato Yanagiya, head of foreign exchange Sumitomo Mitsui Banking Corporation.
In the first step of its renewed bid for funding, Athens must submit detailed reform plans by Thursday, EU President Donald Tusk said after eurozone leaders held an emergency summit with Greek Prime Minister Alexis Tsipras.
All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that will either save Greece's moribund economy or leave it to its fate.
“Tonight I have to say loud and clear - the final deadline ends this week,” Tusk told a news conference.
And European Commission President Jean-Claude Juncker warned “we have a Grexit scenario prepared in detail” if Greece failed to reach a deal, although he insisted he wanted Athens to stay.
The move turns the heat up on Tsipras after Greeks voted Sunday against another round of painful austerity they say has crippled the country.
“While it is looking likely that the ATMs in Greece may soon run dry, and the pressure will rise on the Tsipras government, the big meeting now appears to be a summit on Sunday (again) with all the 28 leaders of the euro area,” Emma Lawson, a senior currency strategist at National Australia Bank, said in a commentary.
“Big confabs have a poor history of reaching agreement is all I shall say. We will hopefully see more in the interim.”
Shanghai and Hong Kong plunged as fears about China's stock collapse spilled over into regional markets and sparked worries that it will hammer China's already struggling economy, the world's second biggest and a key driver of global growth.
The losses come despite government moves to shore up mainland markets, which have plunged more than 30 percent since mid-June.
Trade has “clearly been dominated by safe-haven flows into traditional currencies, the US dollar and yen,” said Derek Mumford, director at Rochford Capital, a currency risk-management company in Sydney.
“For the moment there's a huge amount of uncertainty whether it's China, Europe or even the US.”
* Bloomberg News contributed to this report
AFP