The euro rebounded from a 10-month low on Friday and Asian stocks rallied after euro zone leaders and the IMF agreed to provide a joint financial safety net for debt-laden Greece, lifting some pressure on the single currency.

But the Greece plan did not alleviate longer-term worries about other fiscally vulnerable economies in Europe such as Portugal and Spain, tempering market reaction.

The deal offers Athens loans and cash but only as a last resort and can only be disbursed with unanimous euro zone approval.

Major European markets <.FTEU3> were expected to open slightly lower, according to financial spreadbetters, with some dealers looking to take profits after Wall Street finished slightly lower overnight. <.N>

The euro initially weakened on news of the Greece deal as investors took the view that IMF involvement suggested the 16-country euro zone was unable to handle its problems by itself. But dealers later began to close out some of the bets they had made against the euro, pushing the currency up against the dollar. Dollar weakness, in turn, helped lift oil prices toward $81 and boosted gold.

Basically, it seems the problem will be settled without much turmoil, so things should calm. The only concern is if more problems arise with Portugal and Spain, said Kenichi Hirano, operating officer at Tachibana Securities in Tokyo.

Adding to worries about government bonds, investor demand at auctions of U.S. Treasuries waned for the third day in a row.

The euro was up 0.45 percent to $1.3335 after plumbing a low just below $1.3280. Under pressure from the Greek debt crisis, the euro has fallen 6.8 percent so far in the first quarter against the dollar, on track for the biggest quarterly decline since the third quarter of 2008, when Lehman Brothers collapsed.

The U.S. dollar index <.DXY>, a gauge of the dollar's performance against six other major currencies, slipped 0.3 percent.

UBS currency strategists said in a note that the dollar will likely remain supported against the euro thanks to positive incoming U.S. economic data.

Many of these same factors -- especially growth differentials and the diminished status of the euro owing to sovereign uncertainty -- are likely to remain intact into 2011, they said.

The MSCI index of Asia Pacific ex-Japan stocks <.MIAPJ0000PUS> recouped early losses to rise 0.7 percent, with gains fairly spread out across the sectors. The index is up around 1 percent in the first quarter.

Japan's Nikkei share average <.N225> outperformed the region, rising 1.6 percent to the highest since October 2008, helped by buying of large exporters and technology stocks.

U.S. stock futures flipped to positive as the Nikkei gained, rising 0.2 percent, after the S&P 500 overnight <.SPX> briefly hit an 18-month high in the cash market.

The benchmark yield on the 10-year U.S. Treasury note was down 2 basis points from late Thursday in New York, to 3.86 percent.

A series of poor U.S. debt auctions this week has helped to push up the yield 17 basis points.

The overnight weakness in Treasuries had a knock-on effect on Japanese government bonds. The 10-year JGB yield rose to a four-month high of 1.385 percent.

U.S. crude futures rose 0.6 percent to $81 a barrel, with bulls hoping the U.S. dollar will keep correcting lower.

(Additional reporting by Elaine Lies in TOKYO)

(Editing by Kim Coghill)