Euro hits 2-month low vs yen, then pares most losses

London

THE euro recovered from a two-month low against the yen touched in Asian trade on Monday, with investors brushing off broader political risks arising from German Chancellor Angela Merkel's failure to form a three-way coalition government.

Mrs Merkel, whose conservatives were weakened after they won an election in September with a reduced number of seats, said that she would inform the German president that she could not form a coalition, after the pro-business Free Democrats withdrew from negotiations.