Summary The euro was $1.2883 and 122.55 yen, compared with $1.2881 and 122.59 yen.
TOKYO (AFP) - The dollar and the euro stayed in a narrow range in Asian trade Wednesday and avoided a heavy sell-off despite lawmakers in Cyprus rejecting a bank deposit levy that was integral to a financial rescue for the country.
The dollar hovered around 95.15 yen in the afternoon, compared with 95.23 yen in New York Tuesday.
The euro was $1.2883 and 122.55 yen, compared with $1.2881 and 122.59 yen.
While traders were initially spooked by news that a plan to tax savings by up to 9.9 percent had been dropped, they took heart as European leaders said they were willing to work with Nicosia to help it avoid bankruptcy.
The tax, which would have raised 5.8 billion euros, was a necessary pre-condition for international creditors to release a further 10 billion euros to help the country pay its bills.
With that now in doubt Cyprus must now find other ways to raise cash to repay its debts and Cypriot President Nicos Anastasiades has called an emergency meeting of party leaders Wednesday to find a viable alternative.
However, while Tuesday s events raised the chances of the country leaving the eurozone, analysts said they soothed fears that such levies could be introduced in other troubled eurozone countries, which could have hammered confidence in the region.
Dutch Finance Minister Jeroen Dijsselbloem said Monday the Eurogroup of finance ministers "stands ready to assist Cyprus in its reform efforts", offering easier bank levy terms to reduce the impact on smaller savers.
And the European Central Bank (ECB) also said it would continue to provide financial support for troubled Cypriot banks, a key step to allow all sides a little more time to try to find a way out of the impasse.
Stephen Wood, chief market strategist at Russell Investments, told Dow Jones Newswires: "We re watching very closely, but at present we don t think Cyprus is a game-changer in Europe.
"We re looking at financial-system indicators in Italy, Spain, Portugal, Greece and also bank data to see if there s a run or even a jog on banks in those countries. We don t see that just yet."
But other analysts were more wary.
"The Cyprus issue is far from over," said Stan Shamu, market strategist at IG Markets in Melbourne. "I don t think it will be a situation where the ECB has stepped in and we don t have to worry about it."
Investors are also awaiting the end of a two-day US Federal Reserve meeting for clues over the state of the world s top economy, while the bank s Chairman Ben Bernanke will also address the media.
There are some expectations for a slightly improved view of the US economy.
Against other currencies, the dollar firmed to Sg$1.2521 from Sg$1.2497 a day earlier, to 40.77 Philippine pesos from 40.68 pesos, and to 54.31 Indian rupees from 53.94 rupees.
It also rose to Tw$29.78 from Tw$29.73, to 1,117 South Korean won from 1,112 won and 9,715 Indonesian rupiah from 9,712 rupiah.
However, the dollar eased to 29.22 Thai baht from 29.36 baht.
The Australian dollar eased to $1.0379 from $1.0384 while the Chinese yuan fetched 15.30 yen against 15.35 yen.
