TOKYO: The single European currency was under pressure in Asian trade Monday, with traders mulling the possibility of fresh elections in deadlocked Greece and bailing out of riskier assets.

The euro was changing hands at $1.2890 and 103.23 yen in Tokyo morning trade, against $1.2921 and 103.26 yen in New York on Friday.

Meanwhile, the Australian dollar dropped below parity with the US unit for the first time this year.

Coalition talks in Greece continued throughout the weekend with party leaders failing to form a government, forcing President Karolos Papoulias to call a final meeting for Monday.

In Germany, Chancellor Angela Merkel lost an election in North Rhine-Westphalia, the country's most populous state, raising doubts that her party will be able to stay in power after next year's general election.

The lingering taste of anti-austerity from French voters after their election of socialist Francois Hollande was also affecting the mood.

The dollar firmed to 80.09 yen from 79.93 yen in New York Friday, despite the downward pressure from the murky outlook for Europe.

Barclays Bank chief currency strategist Masafumi Yamamoto cited improving US economic conditions as supporting the pair.

“We expect the US economic indicators due this week will show improvement in the US economic fundamentals, and that should pin the greenback around 80 yen despite concerns over debt worries,” he told Dow Jones Newswires.

Investors were watching to see if renewed concerns over European debt problems would increase demand for the safe-haven currency and send the Japanese unit higher.

Japanese Prime Minister Yoshihiko Noda said in a weekend interview with Dow Jones Newswires that he has not ruled out Tokyo's taking unilateral intervention actions if that becomes necessary.

“The comments are not new, but they were made by the prime minister... We cannot take them lightly,” a senior dealer at a major Japanese bank told Dow Jones Newswires.

The political turmoil in Greece also led traders to sell riskier assets, sending the Australian dollar below parity with the greenback on Monday for the first time since December.

At 1224 (0224 GMT), the “Aussie” was trading at 99.99 US cents, down from 100.14 US cents at the start of Monday's trade.