G7 talk on Greece fails to soothe investors, euro dips

European ministers told their counterparts at a Group of Seven meeting Saturday they would make sure Greece sticks to its budget-cutting plan.

But analysts said Europe needs to go beyond words to restore confidence among investors worried that problems in Greece, Portugal and other weaker euro zone states could upset or derail the global economic recovery.

"What I think is needed is an agreement on behalf of the EU to provide further support for Greece to further ensure that it doesn't default," said Michael Woolfolk, senior currency analyst at Bank of New York Mellon.

The euro fell 0.3 percent from late U.S. Friday levels to $1.3636, edging back towards an 8- month low hit Friday. The single currency has shed around 10 percent from a 15-month high of $1.5145 in late November.

Growing euro zone problems also soured the appetite for currencies like the New Zealand dollar and the Australian dollar, which are dependant on global economic growth.

The kiwi fell to a low of $0.6857, just off $0.6807 struck in Friday's offshore trade, its lowest since September 4.

Japan's Nikkei average <.N225> fell below the 10,000 mark, hovering just above the crucial 200-day moving average, as exporters like Sony Corp <6758.T> were clobbered by a strong yen, which has climbed to multi-month peaks against currencies like the Australian dollar and the sterling.

The yen, traditionally seen as a safe haven in times of market turmoil, has gained 4 percent against the dollar so far this year as investors fretted about the sustainability of the global economic recovery and moved out of riskier assets.

Asia Pacific shares outside Japan as measured by MSCI hovered around their lowest levels since mid-September.