By James Poole and Masaki Kondo March 26 (Bloomberg) -- The euro rebounded from a 10-month low against the dollar and Asian stocks gained after European leaders agreed on an aid plan for Greece, easing concern the nation’s debt crisis will spread and derail the global recovery. Europe’s single currency increased against 13 of its 16 major counterparts and the yen rose from an 11-week low against the dollar. The MSCI Asia Pacific Index climbed 1 percent to 124.51 at 4 p.m. in Singapore and futures on the U.S. Standard & Poor’s 500 Index gained 0.3 percent. The Stoxx Europe 600 Index dropped 0.4 percent at 8:11 a.m. in London. European Central Bank President Jean-Claude Trichet endorsed the plan, toning down his opposition to International Monetary Fund involvement as leaders sought to bury differences on the rescue package. Disagreement over Greek aid, coupled with a downgrade for Portugal’s credit rating this week, has fueled concern that rising budget deficits will undermine the global economy’s rebound from its worst postwar slump. “The Greece issue is somewhat subdued, but the problems of sovereign finance have yet to be eradicated,” said Yoshihiro Ito, a senior strategist at Tokyo-based Okasan Asset Management Co., which oversees the equivalent of $8.1 billion in Tokyo. The euro advanced 0.6 percent to $1.3356 from $1.3273 in New York yesterday, gaining for the first time in four days. The currency fell earlier to $1.3268, the weakest level since May 7. Against the yen, the 16-nation euro gained 0.6 percent to 123.81. The Japanese currency climbed to 92.67 versus the dollar from 92.73 yesterday, on speculation Japanese exporters took advantage of its largest weekly loss this year to buy the currency before the fiscal year ends next week. The yen fell to 92.96 yesterday, the lowest since Jan. 8. Japan Exporters Trichet told reporters in Brussels late yesterday that he was “extraordinarily happy that the governments of the euro area found out a workable solution.” Earlier, the ECB President had said an IMF role would be “very, very bad.” Greece had a budget deficit of 12.7 percent of gross domestic product in 2009, the biggest in the euro-region and more than four times the level permitted under European rules. Asian stocks pared a retreat for the week as the weaker yen boosted the earnings outlook for Japanese companies dependent on overseas demand. Canon Inc., a camera maker that gets 28 percent of its sales from the Americas, climbed 1.9 percent in Tokyo. Advantest Corp., the world’s largest maker of memory-chip testers, gained 3.1 percent after U.S.-based Qualcomm Inc. raised forecasts. China’s Shanghai Composite Index gained 1.3 percent, paring a weekly loss, as banks and developers rose on speculation the central bank will hold off raising interest rates. Fund Flows Shanghai Pudong Development Bank Ltd. and Huaxia Bank Co. gained more than 3 percent. Poly Real Estate Group Co. climbed for the first time in five days after central bank Deputy Governor Zhu Min said current measures to control liquidity are working “very well.” MSCI’s Asia gauge has climbed more than 9 percent from its lowest level in more than two months on Feb. 8 as improving U.S. jobs data, a Federal Reserve pledge to keep borrowing costs low and a Japanese bank-lending program spurred confidence that the global economic recovery remains intact. Emerging-market bond funds received $1.05 billion in the week to March 24, with funds investing in local-currency debt getting record inflows, EPFR Global said in an e-mailed statement. U.S. and developed-market equity funds extended their stretch of net weekly inflows, while European and China equity funds posted outflows, EPFR said. Treasuries Gain Treasuries advanced in Asian trading as some investors said a surge in yields to the highest level in nine months makes government securities worth buying. U.S. debt is still headed for the biggest weekly loss this year as economic reports showed manufacturing is leading the recovery. Orders for durable goods rose in February for a third month, the Commerce Department said March 24. The economy expanded at a 5.9 percent annual rate in the final three months of 2009, the strongest since September 2003, according to a Bloomberg News survey before revised figures from the Commerce Department today. Confidence among U.S. consumers probably fell in March for a second month, indicating lingering concerns about the labor market will weigh on the recovery, economists said before other reports today. The Reuters/University of Michigan final consumer sentiment index for this month fell to 73 from 73.6 in February, according to the median of 64 projections in a Bloomberg News survey. The preliminary reading for the measure, released March 12, was 72.5. The benchmark 10-year yield fell two basis points to 3.86 percent today. The yield has increased 17 basis points this week, the most since the period ended Dec. 25. Copper for three-month delivery gained 0.9 percent to $7,499.50 a metric ton. Crude oil rose 0.8 percent to $81.18 per barrel in New York after earlier dropping as much as 0.6 percent. To contact the reporter for this story: James Poole in Singapore jpoole4@bloomberg.net;

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