HONG KONG: The European Union's muted summit response to the Greek debt crisis depressed the euro in Asian trading Friday as speculators bet on worse to come for the common currency.

EU leaders stopped short late Thursday of offering bailout funds to rescue Greece, a eurozone member whose tattered government finances have highlighted the parlous debt of other crisis-hit countries such as Spain and Portugal.

The union's 27 leaders vowed "determined and coordinated action if needed to safeguard the financial stability in the euro area as a whole" -- a statement that Credit Agricole analyst Mitul Kotecha called a "disappointment".Facts:Greece, the EU, deficits and debt

"Markets had nothing concrete to digest aside from a general agreement to provide assistance if needed," the Tokyo analyst said.

"The end result was a further sell-off in the euro, although equity markets showed a bit more resilience which prevented a sharper fall in euro/dollar."

The euro slid to 1.3663 dollars in Tokyo morning trade from 1.3695 in New York late Thursday, and to 122.53 yen from 122.86.

Asian stock markets were generally higher, however, in quiet trade ahead of Sunday's Lunar New Year and the start of a week-long holiday in China.

Tokyo's Nikkei-225 index gained 74.61 points or 0.75 percent to 10,038.60 by the lunch break. In Hong Kong at noon, the Hang Seng was up 75.77 points (0.37 percent) at 20,366.46.

Australia's S&P/ASX 200 was flat at 4,553.30, while gold prices rallied as investors turned more averse to risk because of the eurozone uncertainty.

Regional equity markets benefited from a Wall Street rally Thursday fuelled in part by better-than-expected US labour market data, showing initial jobless claims fell by 43,000 to 440,000 last week.

The labour report helped the dollar, as did comments Wednesday by Federal Reserve chief Ben Bernanke mapping out an exit strategy from official stimulus support for the world's largest economy.

Heaping pressure on the euro, according to brokers, are speculators building up "short" positions in anticipation of deeper falls for the single currency if Greece's troubles spread further afield.

But DBS Group said that despite the lack of details, the EU's declaration should signal to the market that Germany, France and the rest of the bloc are determined to do "whatever it takes" to limit the Greek contagion.

"After reports that the market has amassed record short positions against the euro, the issue is no longer about Greece but speculation threatening the stability of the single market," the Singaporean banking group said.

"Given the circumstances, the market needs to decide if this is still about Greece or really about the eurozone. It is one thing to break a chopstick. It is another trying to break a bundle of chopsticks," it said.

But Richard Grace, chief currency strategist at Commonwealth Bank of Australia, said the euro's troubles ran deeper than hedge funds and other speculators trying to make a quick buck.

Problems with sovereign debt have "been accompanied by a slowing in the pace of growth within the eurozone area, (contrasting with) rather impressive growth elsewhere, mainly in the US and Asia, so I think that's part of the reason we're seeing the euro fall", he said.

"I suspect that there's still more to play out in this saga and as a result of that the euro will remain quite heavy."

Investors were awaiting a snapshot of eurozone economic growth in the fourth quarter of 2009, expecting modest growth that may do little to relieve pressure on the euro.

Dollar bulls were also eyeing US indicators including January retail sales and a consumer confidence report by the University of Michigan, looking for signs that a US recovery remains on track.