Asian session: The euro traded 0.3 percent from a six-week high versus the yen

The euro traded 0.3 percent from a six-week high versus the yen as Germany signaled its support for a European Central Bank approach to resolve the debt crisis. Merkel is due to host Hollande, Paris-based Agence France- Presse reported, one day before Samaras visits Berlin for talks. Italian media reported that Prime Minister Mario Monti is due in the German capital on Aug. 29, while Spanish Prime Minister Mariano Rajoy has said that Merkel will visit Madrid on Sept. 6.

Asked about ECB chief Mario Draghi’s announcement the bank may return to sovereign bond buying, Merkel said recent ECB decisions “have made it clear that the European Central Bank is counting on political action in the form of conditionality as the precondition for a positive development of the euro.”

The yen headed for its biggest weekly loss in almost two months versus the greenback as the extra yield investors receive from U.S. securities over Japanese debt climbed.

Sales of existing U.S. homes probably rose to a 4.5 million annual rate in July from a 4.37 million pace in June, according to the median estimate of economists surveyed by Bloomberg News before a report by the National Association of Realtors due Aug. 22. Housing starts fell 1.1 percent to a 746,000 annual rate last month from June’s 754,000 pace, Commerce Department figures showed yesterday.

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said he believes the Federal Open Market Committee has gone too far by pledging to hold the main interest rate near zero at least through late 2014.