TOKYO Dec 5 The euro dropped in early Asian
trade on Monday after exit polls showed Italian Prime Minister
Matteo Renzi suffered a heavy defeat in a referendum over his
plan to reform the constitution.
The euro dropped 0.6 percent to $1.0585, edging
closer to its 1 1/2-year low of $1.0518 touched late last month.
Against the yen, the common currency fell more than 1.0 percent
to 119.70 yen.
Italian Prime Minister Matteo Renzi has staked his political
future on the referendum, and many market players expect him to
step down. Renzi will address the nation at around midnight
(2300 GMT), government sources said.
Political instability could undermine Italy's fragile
banking system especially when Monte dei Paschi di Siena
, the country's ailing third biggest lender, needs to
raise 5 billion euros by year end to avert the risk of being
The yen also strengthened about 0.3 percent against
the dollar to 113.61 per dollar, bouncing back further from
9-1/2-month low of 114.83 touched last week.
The dollar softened on Friday as investors took profits from
its recent gains following solid, but not spectacular, U.S.
non-farm payrolls data.
(Editing by Chris Reese)