Asian countries, which have pared debt since the region's 1997-98 economic crisis, will likely fare better than elsewhere if Europe's debt crisis worsens, Singapore's DBS bank said in a report.

"One gets the feeling that the euro zone is turning out to be a basket case and of course rumours about Spain and Portugal's sovereign debt isn't helping"

Jonathan Cavenagh, currency strategist, Westpac, Sydney

"Volatility and some degree of contagion still looks likely until the situation in Europe is clarified," the bank said, according to the Associated Press.

"Thank goodness Asia has spent the last 10 years paying down its foreign and public debt."

"Asia's fundamentals on public and foreign debt should help it weather the storm with relative ease."

In Athens, striking public workers challenged Greece's €110bn ($146.5bn) bailout-for-austerity deal, starting a 48-hour national strike that shut down ministries, tax offices, schools, hospitals and public services.

Investors are also worried Spain and Portugal may need even larger debt bailouts.

"One gets the feeling that the euro zone is turning out to be a basket case and of course rumours about Spain and Portugal's sovereign debt isn't helping," Jonathan Cavenagh, a currency strategist at Westpac in Sydney, told Reuters.

"I suspect the market wants to take the euro to as low as $1.25 in the short term."