* Euro briefly dips below $1.10 before paring losses
* Yen broadly firmer on flight to safety
* Japan says ready to respond as appropriate
* Australian and NZ dollars hit multi-year lows vs USD
By Ian Chua and Gyles Beckford
TOKYO/SYDNEY, July 6 (Reuters) - The euro pared its losses but was still sharply lower on Monday after Greek voters overwhelmingly rejected terms of a rescue package, sending the safe-haven yen up amid fears the cash-strapped nation might exit the euro zone.
The common currency skidded to a six-week low of 133.700 yen very early in the Asian session, from 136.185 late on Friday. It had since rebounded to 135.355, down about 0.6 percent on the day.
Against the greenback, the euro fell as far as $1.0969 , but did not approach the one-month trough of $1.0955 set a week ago. It recovered some ground to buy $1.1045, down about 0.6 percent.
“It seems to have been fairly well-contained, at this stage. The moves have not been as dramatic as some anticipated,” Mitul Kotecha, head of Asia-Pacific FX strategy for Barclays in Singapore.
“It does seem like a lot of investors are still sidelined, unwilling to take risk on at this stage,” he said. “It doesn’t look like a panic selloff, because investors want to see what happens now, in the next stage of Greece’s saga.”
Japan’s top government spokesman, Chief Cabinet Secretary Yoshihide Suga, told a news conference on Monday that the impact from Greece on share prices and the foreign exchange market has been very limited and within expectations.
Japanese policymakers pledged to work closely to guard against financial market volatility.
While the euro rose off its session lows on Monday, its downside appeared increasingly vulnerable as many investors began pricing in the higher likelihood that Greece will eventually withdraw from the common currency.
The vote to reject the terms of the bailout, with the ”No’ camp prevailing by a much higher margin than expected, deepened Athen’s standoff with lenders.
“The ‘no’ vote is the worst possible outcome from an ‘uncertainty’ perspective,” said Ray Attrill, global co-head of FX strategy at National Australia Bank.
“‘Grexit’ risk has clearly risen sharply, and is now the singularly most likely scenario following the referendum. That said, other scenarios, under which a new deal is eventually agreed ... can still sum to a probability of close to 50 percent.”
Stunned European leaders called a summit for Tuesday to discuss their next move.
The European Central Bank, which holds a conference call later on Monday, is likely to maintain emergency funding for Greek banks at their current restricted level, people familiar with the matter said.
“The ECB will likely keep this open until it gets clarity from political leaders. In any case, markets are in for a period of uncertainty and protracted negotiation,” said Bank of New Zealand currency strategist Raiko Shareef.
The ‘No’ vote triggered a rush to safety, with the yen being the main beneficiary. The dollar fell to a six-week low of 121.700 yen early in the Asian session, and last stood at 122.570, down about 0.2 percent.
Another safe-haven currency, the Swiss franc, also firmed slightly. The Swiss National Bank, which recently intervened to hold down the franc’s rise, has already warned it would fight any rush to buy the currency.
The euro initially slid towards 1.0320 francs from around 1.0436 late on Friday, but has since returned to 1.0414.
Traders said the threat of central bank intervention was probably helping to put a floor on the euro for now.
The Australian and New Zealand currencies, usually used as a risk proxy, fell heavily.
The Australian dollar skidded to a six-year trough of $0.7452, while its New Zealand peer touched a five-year low of $0.6645. The Aussie has since edged back to $0.7482, while the kiwi was at $0.6680. (Additional reporting by Lisa Twaronite in Tokyo; Editing by Shri Navaratnam)