TOKYO — The euro rose against the dollar and yen in Tokyo trade on Monday afternoon on news of a victory for pro-bailout parties in Greece’s closely watched general election. The euro briefly hit 1.2747 in early trade, up from US$1.2644 late Friday, as markets breathed a sigh of relief over the polls, which erased fears Greece may renege on terms of a bailout deal and ultimately exit the eurozone. But the rally lost steam in the afternoon and the unit sat at US$1.2707 amid caution over whether the polls were enough to ensure a positive long-term outlook for the unit, said a senior dealer at a major bank in Tokyo. In Tokyo afternoon trade, the single currency was up at 100.46 yen, from 99.47 yen in New York. The dollar rose to 79.10 yen from 78.67 yen. “It is highly possible that a sense of relief will prevail in markets over a short term. Over a long-term, however, the euro’s weak tone will likely continue,” Credit Suisse analyst Hiromichi Shirakawa said in a research note.
The 17-nation eurozone still faces pressures over the weak state of its finances, which would delay any real economic recovery, Shirakawa added. Tensions had been mounting up to the Greek vote with the single currency hitting multimonth lows in recent weeks.