TOKYO: The euro rose against the dollar in Asia on Thursday as investors bought the common currency back ahead of a European Union summit aimed at resolving the eurozone debt crisis.

The euro rose to $1.2514 in Tokyo afternoon trade from $1.2467 in New York late Wednesday while holding flat at 99.38 yen.

While hopes are shrinking for a breakthrough to fix the continent's fiscal woes, the euro rose as investors covered their piled-up short positions, said a Japanese bank dealer.

The dollar was weaker at 79.41 yen from 79.71 yen in US trade.

German leader Angela Merkel held last-minute discussions Wednesday with French President Francois Hollande before the crucial summit but warned she would not budge in her opposition to pooling eurozone debt.

EU leaders are gathering in Brussels for the two-day meeting aimed at containing the 17-nation eurozone debt crisis, now in its third year, as the bloc's problems widen.

Cyprus and Spain have joined the earlier victims of contagion -- Greece, Portugal and Ireland -- in requesting bailout funds.

With Italy, the eurozone's third economy, also threatened, the EU is under pressure from world leaders to deliver a convincing plan to prevent a collapse of the single currency, which would have massive global repercussions.

“The key is whether talks of supporting financial institutions like the banking union and talks of growth strategy will move forward a little bit,” a senior dealer at a major Japanese bank told Dow Jones Newswires.

Given relatively low expectations for any drastic measures to be taken, any outcome from the summit was unlikely to raise the euro's downside risk significantly, he added.

“Caution over European sovereign debt problems continues to be high,”Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ, said in a note, adding that the results of an Italian bond auction would also impact the euro.

The dollar was mostly lower against other Asia-Pacific currencies.

It fell to Sg$1.2757 from Sg$1.2784 on Wednesday, to Tw$29.89 from Tw$29.90, to 1,153.20 South Korean won from 1,157.16 won, and to 42.27 Philippine pesos from 42.41 pesos.

It also fell to 9,481.00 Indonesian rupiah from 9,493.00 rupiah, to 31.85 Thai baht from 31.87 baht, and to 57.07 Indian rupees from 57.19 rupees.

The Australian dollar firmed to US$1.0117 from US$1.0059, while the Chinese yuan was flat at 12.49 yen.