The yen advanced against its major counterparts as stocks declined amid reports showing Europe’s biggest economies are slowing, fueling concern some countries in the region will struggle to plug their budget deficits. Japan’s currency climbed to its strongest level in almost two months against the 16-nation euro as the Stoxx Europe 600 Index fell 0.5 percent. Japan’s Economy Minister Banri Kaieda said the country can’t combat gains in its currency alone. The pound weakened against the dollar as a report showed U.K. consumer confidence fell to a 19-month low in October. Europe’s currency pared losses after Italy sold bonds. “The yen’s gains are primarily a reaction to increased risk aversion in the market,” said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. “There’s still ongoing debate about what the Bank of Japan can or should do” regarding stemming the currency’s gains, he said. Japan’s currency rose as much as 1.5 percent against the euro, to 111.05, its strongest level since Sept. 16. The yen was trading 0.3 percent higher at 112.44 per euro at 6:17 a.m. in New York, compared with 112.73 yesterday. The yen strengthened to 82.17 per dollar from 82.49, cutting its decline this week to 1.1 percent. The European common currency climbed to $1.3709 from $1.3667, after sliding earlier to $1.3574, the weakest level since Sept. 30. Stocks fell across Europe as reports showed German and French growth slowed in the third quarter while the Dutch economy contracted. The euro area economy grew 0.4 percent in the third quarter, after expanding 1 percent in the previous three months, the European Union’s statistics office said. The common currency is set for its biggest weekly drop against the dollar since the period ended Aug. 13. Pound Declines The British pound lost 0.5 percent to $1.6046, pushing its decline this week to 0.8 percent. It snapped six days of gains versus the euro, trading 0.8 percent weaker at 85.43 pence. Nationwide Building Society’s index of consumer sentiment in Britain slipped 1 point from September to 52, the lowest since March 2009, the customer-owned lender said in an e-mailed statement today. The measure of consumers’ future expectations fell 4 points to 70, also a 19-month low. The euro declined earlier as European finance ministers sought, during a Group of 20 summit in Seoul, to reassure investors who have driven bond yields to records in Ireland and Portugal. Officials from Germany, France, Italy, Spain and the U.K. issued a statement in South Korea saying a crisis- resolution mechanism they’re discussing that may force bondholders to share the cost of a bailout wouldn’t apply to outstanding debt. ‘Euro Weakness’ “There’s a lot of euro weakness because of the debt crisis,” said Ulrich Leuchtmann, Frankfurt-based head of currency strategy at Commerzbank AG. “The topic was out of the market for a while. With Ireland and Portugal reaching new lows nearly every day, this has to come to the market’s mind.” The single currency erased today’s decline against the dollar after Italy sold 7.92 billion euros of bonds maturing between 2015 and 2034. Its sale of 1.17 billion euros of 2034 securities received bids equivalent to 1.72 times the amount on offer, up from a so-called bid-to-cover ratio of 1.51 times in March 2009. To contact the reporters on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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