The single currency, which slumped to as low as $1.0505 in early Asian trade after opening at around $1.0685, pulled back up to $1.0562.
The drop to its session low was the sharpest fall since June and opened the way to a retest of the March 2015 trough around $1.0457.
The single currency dropped as much as 2.1 percent to 118.71 yen, but pared some of the losses to trade down 0.9 percent at 120.06 yen.
"The 'no' vote was priced in to a certain extent in advance. So I do not expect a freefall in the euro in the near term," said Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi.
"But in the long run, this will delay progress in Italy's efforts to get rid of banks' bad debt and is likely to widen the yield spread of German Bunts and the Italian bonds," he added.
The dollar was supported by expectations of a US rate increase this month and gained 0.1 percent to 113.74 yen.
The New Zealand dollar slipped 0.7 percent to $0.0782 after Prime Minister John Key unexpectedly announced his resignation on Monday, saying it was the "right time" to leave politics.
Key, a former foreign exchange dealer who worked at firms including Merrill Lynch, won office for the National Party in 2008, ending the nine-year rule of Labour's Helen Clark.
New Zealand stocks retreated 0.3 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent, while E-mini futures for the S&P 500 lost 0.4 percent.
Japan's Nikkei slid 0.6 percent.
Dealers said Italian bonds were set to come under pressure as top-rated U.S. Treasuries and German bunds gained. Futures for US 10-year Treasury notes added 10 ticks.
Investors and Europe's politicians fear victory for the opposition 'No' camp could cause political instability and renewed turmoil for Italy's banking sector, which has been hit by fears over its huge exposure to bad loans built up during years of economic downturn.
Renzi's resignation represents a fresh blow to the European Union, the euro zone's heavily indebted third-largest economy which is struggling to overcome a raft of crises.
Ultimately, the danger is that Italy holds a vote on whether to leave the euro, possibly triggering a break up of the entire bloc.
Analysts at RBCCM argued that, based on what happened in 2012 at the height of the Greek crisis, such a risk could see the euro trade as low as $0.8000.
"It may sound extreme, but if a second euro zone crisis were to hit, with the U.S. dollar at a much stronger starting point, EUR/USD could arguably trade lower still," they wrote.
Markets had earlier taken some encouragement when Austria's far-right presidential candidate was soundly defeated by a pro-European contender, confounding forecasts of a tight election.
The European Central Bank also meets Thursday amid much speculation it will announce a six month extension of its asset buying program and widen the type of bonds it can purchase.
"There has been some speculation that the ECB would step and front load purchases of Italian bonds if markets became unsettled by a 'No' result, so perhaps it is the thoughts of a central bank liquidity sugar pill driving things again," said ANZ economist Jo Masters.
OIL PULLS BACK
Wall Street ended last week on a cautious note, with the Dow off 0.11 percent, while the S&P 500 rose 0.04 percent and the Nasdaq gained 0.09 percent.
While Friday's U.S. payroll report was firm enough to cement expectations of a rate hike by the Federal Reserve this month, a surprise pullback in wages helped bonds pare a little of their recent losses.
In commodity markets, oil ran into profit-taking after boasting its best week in at least five years following OPEC's decision to cut crude output.
Markets are now focused on the implementation and impact of OPEC's first output cuts since 2008, to be joined by Russia and possibly other non-OPEC producers.
Brent crude was down 49 cents at $53.97 a barrel, while U.S. crude lost 37 cents to $51.31.
source: news.abs-cbn.com
