Euro down as negotiations on Greek debt bailout break up

The euro slipped in Asian trade on Thursday after talks between Greece and its European creditors on restructuring the country's bailout broke up without agreement.

Japanese shares surged to a more than seven-year high as the yen retreated against the dollar thanks to investors betting on the US Federal Reserve hiking interest rates soon.

The Nikkei in Tokyo, which was closed on Wednesday for a public holiday, rallied 1.85 percent, or 327.04 points, to 17,979.72 - its best finish since July 2007.

Sydney retreated 0.44 percent, or 25.5 points, to close at 5,743.6 after data showed Australian unemployment at a 12-year high. Seoul eased 0.21 percent, or 4.07 points to 1,941.63.

The focus of attention was on Europe, where eurozone finance ministers were unable to hammer out a renegotiation of Greece's bailout terms.

Jeroen Dijsselbloem, head of the Eurogroup of eurozone ministers, said six hours of talks produced no deal on an extension of Athens' 240 billion euro EU-IMF rescue program.

Greece's bailout is due to expire at the end of February and failure to agree an extension would see Greece default on its giant debts, almost inevitably meaning that it would crash out of the eurozone.

Prime Minister Alexis Tsipras led the leftist Syriza party to victory in elections last month vowing to bring an end to austerity measures imposed under the bailout.

On currency markets the euro bought $1.1313 and 136.00 yen, down from $1.1332 and 136.37 yen in New York on Wednesday afternoon.

Fed rate hike in view

"In global terms, the view over Greece is mixed, with a majority saying the Greek situation will have limited impact on global markets and economies," Andrew Clarke, director of trading at Mirabaud Securities Asia in Hong Kong, told Bloomberg News.

"However, there are a few that think that view is slightly naive. If Greece does pull out and defaults on its debt, what will stop Spain, Italy, Ireland and Portugal from doing the same?"

The greenback held above 120 yen, with analysts predicting it could advance further if US retail sales later on Thursday come in strong.

The dollar was at 120.20 yen, compared with 120.35 yen in US trade but well up from 119.70 yen in Asia on Tuesday.

Dealers are moving back into the US unit after another strong jobs report increased the likelihood the Fed will bring forward its timetable for raising rates.

Figures showing Australian unemployment hit a 12-year high of 6.4 percent in January increased the chances the country's central bank will cut interest rates, sending the local dollar tumbling.

The Australian dollar hit a near six-year low of 76.59 US cents on Thursday, from 77.26 US cents before the jobs data release.

On oil markets US benchmark West Texas Intermediate for March delivery rose 69 cents to $49.53 while Brent crude for March gained 34 cents to $55.00 in afternoon trade.

Gold fetched $1,223.11 an ounce, against $1,234.49 on Wednesday.