Euro jumps in Asian trade after Spain bank bailout

The euro jumped against the dollar and yen in early Asian trade Monday after the 17-nation eurozone agreed to lend Spain as much as 100 billion euros ($126 billion) to shore up its battered banking system. The single currency bought $1.2644 and 100.63 yen, against $1.2514 and 99.49 yen in New York on Friday. The rise comes after Madrid at the weekend agreed to the bailout package, which Spain's Economy Minister Luis de Guindos insisted was not a rescue but a loan that imposes conditions on the banks. However, the deal marked a dramatic climbdown for Spain which had hotly denied any need for outside aid. Investor concerns have weighed on the euro with tensions already high over a possible Greek exit from the bloc. EU Economic Affairs Commissioner Olli Rehn said the Spain deal was criticalto reassuring jittery markets. "It is a very clear signal to the market, to the public, that the euro (area) is ready to take decisive action in order to calm down market turbulence and contagion," Rehn said. After an emergency video conference lasting more than two hours on Saturday, eurozone finance ministers issued a statement saying they were "willing to respond favourably" to a Spanish plea for help. The deal was hailed by Germany, France, Japan and the United States as well as the International Monetary Fund. Defying all efforts by policymakers, the eurozone emergency has now spread to the region's fourth-biggest economy -- Spain's is twice the size combined of those of Greece, Ireland and Portugal, the countries bailed out so far. Prime Minister Mariano Rajoy's conservative government bowed to pressure from world leaders and markets, which have sent Spanish borrowing costs soaring. The dollar, meanwhile, was higher against the yen in Asian trade at 79.58yen, from 79.49 yen on Friday.