Financial Turmoil

TOKYO, March 18, 2013 (AFP) – The euro dived in Asia Monday as news that Cyprus would have to tax bank customers’ deposits as part of an EU bailout stoked eurozone fears, sending investors flocking to the safe-haven yen. In afternoon Tokyo trade, the euro sank to 121.77 yen from 124.61 yen in late New York trade Friday and to $1.2902 from $1.3075.

The dollar also weakened to 94.36 yen from 95.26 yen.

As a condition for a desperately needed 10-billion-euro rescue, fellow eurozone countries and international creditors at the weekend imposed a levy on all deposits in the island’s banks.

Cypriot bank customers have voiced dismay and anger that they alone of the five eurozone member countries forced to seek bailouts so far were being expected to help foot the bill.

But President Nicos Anastasiades said the levy on private depositors was the “least painful” option for the recession-hit island. The Cypriot leader warned that rejecting EU demands would have seen Cyprus exit the 17-nation eurozone and face bankruptcy.

Under the proposal, which must be passed by parliament in Nicosia, deposits of more than 100,000 euros will be hit with a 9.9 percent charge and 6.75 percent for anything below th