The euro plunged to a one-year low against the yen on Thursday as investors shunned riskier currencies for the safe-haven Japanese unit amid the public finances crisis afflicting Greece.

The European single currency hit 120.44 yen -- the lowest level since February 24, 2009.

In later London trade, the euro stood at 120.58 yen compared with 121.99 yen late in New York on Wednesday.

The euro meanwhile dropped to 1.3477 dollars from 1.3534 dollars on Wednesday.

Because euro-selling for the Japanese currency involves selling dollars for yen in the process, the US unit also slipped to the lowest levels in some two weeks.

The greenback fell to 89.47 yen, its weakest since February 10, down from 90.12 yen in New York.

The euro took a beating after a warning on Wednesday by Standard & Poor's credit ratings agency that it could downgrade Greece by one or two notches within the next month, dealers said.

The Wall Street Journal also reported Thursday that any bailout for Spain -- whose 1.6-trillion-dollar economy is nearly double those of troubled eurozone partners Greece, Portugal and Ireland combined -- would be far costlier.

"Although the report wasn't a particularly new topic, hedge funds, retail and institutional players took cues from it" on mounting concern that other areas in Europe may also suffer similar fiscal problems, a dealer said.

"Players will keep a close attention to whether the eurozone economy shows further weakness," the dealer at a major Tokyo bank told Dow Jones Newswires.

The single currency's plight triggered a decline in the pound, which fell to a 10-month low of 137.25 yen, compared with 138.80 yen Wednesday, and to a nine-month low at 1.5325 dollars from 1.5398.

The dollar also lost ground against the yen after US news of weak home sales data and remarks by Federal Reserve chairman Ben Bernanke that the central bank was not yet ready to abandon its ultra-low interest rates.

"Everybody had expected a good figure for January homes sales but it turned out to be so weak, prompting market players to sell dollars," said Daisuke Karakama, a market economist at Mizuho Corporate Bank.

"The Bernanke testimony fuelled the trend," he said, adding that the Greek crisis also helped boost the Japanese currency, which is considered even safer than the usual safe-haven dollar.

In London on Thursday, the euro was changing hands at 1.3492 dollars against 1.3534 dollars on Wednesday, at 120.58 yen (121.99), 0.8818 pounds (0.8785) and 1.4632 Swiss francs (1.4634).

The dollar stood at 89.37 yen (90.12) and 1.0845 Swiss francs (1.0810).

The pound was at 1.5295 dollars (1.5405).

On the London Bullion Market, the price of gold dropped to 1,092.40 dollars an ounce from 1,103 dollars an ounce on Wednesday.