American focus: euro fell

The yen strengthened against all of its major counterparts as concern increased that Greek bailout negotiations will hinder efforts to resolve the financial crisis, boosting demand for haven assets.

The euro fell below 100 yen for the first time in a week as European Union leaders met in Brussels, and Italy raised less than its maximum target at a bond sale after Fitch Ratings downgraded the nation last week. The dollar touched the weakest against the yen since Oct. 31, when it reached a record low. The Swiss franc strengthened to the highest level against the euro since September.

EU leaders met to put the finishing touches on a German-led deficit-control treaty and endorse the statutes of a 500 billion-euro ($656 billion) rescue fund to be set up this year. While Greece and its private creditors said Jan. 28 they expect to complete a debt-swap deal to reduce the nation’s obligations in coming days, it now requires 145 billion euros for the second bailout, 15 billion euros more than was agreed in October, Der Spiegel reported Jan. 28.

Euro-area leaders are mulling policy responses to states that are “off-track” in fulfilling budget pledges, including supplying external advisers with decision powers to states in difficulty, German Finance Ministry spokesman Martin Kotthaus said at a press conference in Berlin.

Italy sold 7.5 billion euros of debt due between 2016 and 2022 today, less than its maximum target of 8 billion euros. Fitch cut the ratings of Italy, Spain, Belgium, Slovenia and Cyprus on Jan. 27, saying they lack financing flexibility in the face of the regional debt crisis. Italy was reduced two levels to A- from A+, and Spain was lowered two grades to A from AA-.