Greece votes ‘No’ to bailout package

WELLINGTON (Reuters) - The euro fell sharply on Monday in Asia-Pacific trading after Greeks looked to have overwhelmingly rejected austerity measures demanded in return for bailout money.

The euro initially fell about 1.4 percent against its U.S. counterpart but trimmed its losses slightly to last trade at $1.0992.

The latest reports from Greece said around 60 percent of those voting in the referendum had backed the government and rejected the bailout conditions.

'This does two things: it legitimizes the stance of the Greek government and it leaves the ball in Europe's court,” ANZ Bank analysts said in a note. 'Europe either folds or Greece goes bankrupt; over to you [German Chancellor Angela] Merkel.”

European Council President Donald Tusk called a eurozone summit for Tuesday to discuss the Greek debt crisis in the wake of Greece's bailout rejection.

'I have called a EuroSummit Tuesday evening at 1800 [note: 11 a.m. Iowa time] to discuss situation after referendum in Greece,” Tusk said on Twitter.

European Commission President Jean-Claude Juncker will hold a conference call with Tusk, Eurogroup President Jeroen Dijsselbloem and European Central Bank President Mario Draghi on the Greek situation on Monday morning, the Commission said.

The next step was unclear with Greek Prime Minister Alexis Tsipras saying his government had a mandate to reach a viable solution and was ready to resume talks.

The first test looked to be whether the European Central Bank (ECB) would maintain emergency funding for Greek banks at the current restricted level.

'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, with the euro down 1.6 percent against the yen to 134.24 yen, while the U.S. dollar traded at 121.94 yen from 122.80 on Friday.

The New Zealand and Australian dollars, often taken as a proxy for risk appetite, also trimmed early losses, but the kiwi was down 0.5 percent, just above a five-year low at $0.6645, while the Aussie was down 0.5 percent at $0.7473, just above a six-year low.