The euro jumped more than one US cent after news that European finance chiefs had agreed a crucial deal to provide a massive bailout to debt-wracked Greece.
The common European currency jumped to $1.3291 within minutes of the announcement from Brussels, from $1.3185 immediately before.
It later eased back to change hands at $1.3265 but was still up from the $1.3237 it reached in late trade Monday in London.
It also gained to 105.75 yen after the deal, before edging back to 105.54 yen, compared with 105.36 yen in London.
The dollar firmed to 79.69 yen from 79.59 yen. New York markets were closed for a public holiday.
After marathon talks that ran from Monday into the early hours of Tuesday in Brussels a source said: "We have the essentials of the deal."
"The announcement sparked euro buying," said Tsunemasa Tsukada, chief manager at the currency sales department at Mitsubishi UFJ Trust and Banking.
Some others sold the yen for the euro to stop losses after seeing the euro's rise, he said.
Eurozone finance ministers gave the green light to a 130 billion euro ($171 billion) rescue package for Athens, in exchange for strict surveillance of its finances over the coming years.
There was also an agreement for private creditors to write down 53.5 percent of the Greek sovereign debt they hold -- 3.5 percentage points higher than the terms earlier agreed -- which amounts to around 100 billion euros.
The deal will bring Greek government debt down to 120.5 percent of gross domestic product (GDP) by 2020, a eurozone government source said.
The figure is just a fraction above the 120-percent target set by the European Union and International Monetary Fund.
Tuesday's agreement means Greece will be able to continue servicing its debts and for the time being avoid a default many fear would have led to it falling out of the eurozone, which could precipitate another global downturn.
The dollar was mixed against other Asian currencies, falling to 1,123.40 South Korean won from 1,123.60 Monday, but rising to 42.66 Philippine pesos from 42.47 pesos.
It also firmed to 9,045.00 Indonesian rupiah from 9,030.00 rupiah and bought Tw$29.56 compared with Tw$29.53, while fetching Sg$1.2536 from Sg$1.2535, and 30.75 Thai baht from 30.74 baht.