The euro slipped in Asian trade on Thursday while most equity markets sank after talks between Greece and its European creditors on restructuring the country's bailout broke up without agreement.
Japanese investors bucked the regional trend, lifting the Tokyo market as the yen retreated against the dollar thanks to investors betting on the US Federal Reserve hiking interest rates by the middle of the year.
Japan's Nikkei, which was closed Wednesday for a public holiday, rallied 1.78 percent.
However, Hong Kong lost 0.16 percent, Shanghai fell 0.18 percent and Seoul dipped 0.44 percent.
Sydney retreated 0.21 percent after data showed Australian unemployment at a 12-year high.
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 programme.
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 hard-left 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 $1.1310 and 135.90 yen early Thursday, down from $1.1332 and 136.37 yen in New York Wednesday afternoon.
However, despite the broad weakness in markets, analysts were less worried.
"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 Thursday come in strong.
The dollar was at 120.06 yen, compared with 120.35 yen in US trade but well up from 119.70 yen in Asia earlier 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 Aussie hit a near six-year low of 76.56 US cents Thursday, from 77.26 US cents before the jobs data release.
On oil markets West Texas Intermediate for March delivery rose 59 cents to $49.43 while Brent crude for March gained 39 cents to $55.05.
Gold fetched $1,222.90 an ounce, against $1,234.49 on Wednesday.