The yield on a 10-year bond was at 6.65 percent in early Asian trade, well down from the 6.77 percent seen before his announcement, but still at a level that traders say is unsustainable over the long run. Berlusconi said he would step down after his coalition lost its parliamentary majority in a budget vote as the eurozone's third largest economy becomes the latest casualty of the region's sovereign debt crisis. "Risk appetite is improving, with investors favouring cyclicals over defensives amid relief that Berlusconi is stepping down," said CBA institutional equities head of sales Justin Rooney in Sydney. But Credit Agricole warned in a note that with Italian 10-bond yields "dangerously close to the 7 percent level", the euro will remain under pressure, adding that markets will be on edge until the political deadlock in Italy and Greece is resolved. In early Asian trade the euro bought $1.3837, compared with $1.3773 at the same time Tuesday, while it was also at 107.50 yen against 107.24 yen. Markets have been punishing Italy for weeks over what is seen as Rome's inability to make necessary changes to balance the budget and keep on top of its debt mountain, which is equal to 120 percent of gross domestic product.