The euro soared in early Asian trade on Monday, with markets breathing a sigh of relief after Greece's two main pro-bailout parties clinched enough votes to form a government in tight polls. Tension had been mounting up to the vote with the single currency hitting multi-month lows in recent weeks, but on Monday the euro was buying $1.2739 and 100.75 yen, from $1.2644 and 99.47 yen in New York trade on Friday.
The vote in favour of parties that backed a European Union-International Monetary Fund bailout for Athens came amid a wave of anti-austerity sentiment, with fears growing that the debt-hit nation may renege on its commitments and ultimately leave the bloc, dealing a significant blow to the whole region.
Sunday's crucial election was the second in six weeks in Greece after May 6 polls failed to produce a government, stirring fears that the political stalemate would paralyse efforts to bring Greece back from the brink.
Athens has been forced to seek bailouts twice in recent years amounting to about 347 billion euros ($442 billion), and European leaders warned Greece it must respect its international debt commitments or risk leaving the euro club.
Despite the reprieve offered Sunday, analysts warned that it would not vanquish concerns about the embattled eurozone or Greece's economic future.
"There are still many question marks over Greece's ability to adhere to the package it has signed up for and the very real economic weakness that its economy is facing," John Horner, a Sydney-based currency strategist at Deutsche Bank, told Dow Jones Newswires.
"The medium-term questions remain very much in place."
Antonis Samaras, the leader of the conservative New Democracy party, which preliminary official results showed in the lead with 30.04 percent, said after the vote that "the country does not have a minute to lose."
"We ask all political forces which share the aim of keeping the country in the euro... to join a government of national unity."
Samaras's main rival Alexis Tsipras, head of the leftist anti-austerity party Syriza, who had said a victory would mean renegotiating the rescue plan or tearing it up, conceded defeat and ruled out joining any coalition.
The EU and IMF pledged support to the next Greek government.
"We are hopeful that the election results will allow a government to be formed quickly," said the presidents of the European Council and the chairman of the European Commission, Herman Van Rompuy and Jose Manuel Barroso.
"We will continue to stand by Greece as a member of the EU family and of the euro area," they added, in a statement issued in the Mexican town of Los Cabos on the eve of the G20 summit of the world's leading economic powers.
A short statement from the International Monetary Fund indicated it will set about a renegotiation of Greece's 130-billion-euro bailout programme.
"We take note of the election results in Greece and stand ready to engage with the new government on the way forward to help Greece achieve its objective of restoring financial stability, economic growth and jobs," it said.
In other Asian forex trade, the dollar climbed against the Japanese currency to 79.09 yen from 78.67 yen.
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