TOKYO- The euro edged higher in Asian trade Tuesday as Europe's debt woes eased slightly, dealers said.

The euro firmed to 1.3653 dollars in Tokyo morning trade from 1.3648 in New York late Monday, and to 121.92 yen from 121.86. The dollar was flat at 89.29 yen.

The euro added gains after "the cost of insuring government debt in Greece, Spain and Portugal eased a little and European equity markets posted modest gains," noted NAB Capital strategist John Kyriakopoulos.

But he warned that concerns over Europe's debt problems "are still simmering away" as eurozone finance chiefs at a weekend Group of Seven meeting in Canada failed to produce strong signals over a rescue plan.

"While European policy makers are adamant the situation in under control, market participants are very still sceptical," he added.

In recent weeks, the euro has been hammered by worries that debt-ridden countries such as Greece, Spain and Portugal may be unable to restore stability to their public finances, having spent heavily to combat recession.

Greece has a public debt of more than 294 billion euros (412 billion dollars).

In thin trade investors had their eyes on Chinese exports and new loan data out on
Wednesday to gauge prospects for fresh measures by Beijing to prevent its economy overheating, dealers said.