By Shiyin Chen June 17 (Bloomberg) -- The euro weakened for a third day against the yen, stocks in Asia and Europe headed for a seventh week of losses, and oil fell before German and French leaders meet today to discuss the struggle to avert a Greek default. Europe’s shared currency dropped 0.4 percent to 114.15 yen and slid 0.3 percent to $1.4165 at 4:03 p.m. in Tokyo. The MSCI Asia Pacific retreated 0.5 percent, bound for its longest weekly slump since 2004, while the Stoxx Europe 600 Index sank 0.6 percent, taking its five-day loss to 1.2 percent. Futures on the Standard & Poor’s 500 Index were little changed. Crude decreased 0.5 percent in New York and wheat retreated for a fifth day. Former Federal Reserve Chairman Alan Greenspan said a Greek default is “almost certain” and could help drive the U.S. into recession, while Jean-Claude Juncker, head of the euro-region finance ministers group, said a “hard haircut” will risk contagion to other European countries. German Chancellor Angela Merkel and French President Nicolas Sarkozy will discuss a rescue package for Greece, where Prime Minister George Papandreou is set to announce changes to his cabinet. “At the moment the policy seems to be to kick the can down the road and eventually markets might tire of it,” Geoff Lewis, the Hong Kong-based head of investment services at JPMorgan Asset Management, said in a Bloomberg Television interview. “A lot of us expect that at some point there will be a default or reprofiling. A ‘soft’ default now to tackle the question firmly would be the right thing to do.” Greek Crisis The euro weakened against 12 of its 16 most actively traded peers. Greek 10-year government bonds declined for a ninth day. Papandreou needs to keep his party’s shrinking parliamentary majority in line to pass 78 billion euros ($110 billion) in austerity measures required for Greece to get a second bailout from the European Union. A “haircut” for holders of Greek securities will have unpredictable knock-on effects, Juncker said in an interview with newspaper Tagesspiegel. “The problem you have is that it’s extremely unlikely the political system will work” in a way that solves Greece’s crisis, Greenspan, 85, said in an interview yesterday with Charlie Rose in New York. “The chances of Greece not defaulting are very small.” Greece’s debt crisis has the potential to push the U.S. into another recession, said Greenspan, who ran the U.S. central bank from 1987 to 2006. The Thomson Reuters/University of Michigan index of U.S. consumer sentiment slipped to 74 from 74.3 in May, according to a Bloomberg News survey before today’s report, while separate data may show an improvement in leading indicators. ‘Rough Patches’ The Dollar Index climbed 0.3 percent, poised for a second weekly gain. Treasuries were little changed following a two-day rally, with 10-year notes yielding 2.93 percent. The S&P 500 rose 0.2 percent yesterday, rebounding from a three-month low. The index has dropped 7 percent since its high this year reached on April 29, leaving it just 0.8 percent higher for the year. Research In Motion Ltd. dropped as much as 17 percent in late trading after the maker of BlackBerry phones said quarterly revenue may drop for the first time in nine years. “We do expect these rough patches to continue but over time the market will trend upward” Peter Andersen, Boston-based senior portfolio manager at Congress Asset Management, said in a Bloomberg Television interview. “Earnings season is coming up and we’re starting to see companies pre-warn on the negative side, but on the other side, we’re seeing a good amount of merger and acquisition activity.” Longest Slump The MSCI Asia Pacific Index’s seventh straight weekly retreat will be its longest slump since August 2004. Declines drove the gauge’s valuation down to 14.1 times reported profits, the lowest level since March 29. South Korea’s Kospi index lost 0.7 percent, Japan’s Nikkei 225 Stock Average slipped 0.6 percent and Hong Kong’s Hang Seng Index slid 0.6 percent. Hynix Semiconductor Inc. dropped 6.1 percent after Korea Investment & Securities Co. cut its share- price estimate. DeNA Co. jumped 3.5 percent after the operator of a social media online site lifted its net income forecast. The yuan climbed 0.12 percent to 6.4669 per dollar and earlier touched 6.4634, the strongest level since China unified official and market exchange rates at the end of 1993. That’s also the highest since the government scrapped a two-year peg on June 19, 2009. Oil for July delivery lost 0.4 percent to $94.62 a barrel on the New York Mercantile Exchange, after earlier climbing as much as 0.5 percent to $95.40. Futures have declined 4.7 percent this week, the most since the period ended May 6. Wheat for September delivery dropped 0.9 percent to $7.0175 a bushel, on course for an 11 percent weekly slump. Corn retreated as much as 0.8 percent to $6.4775 a bushel before trading little changed at $6.525. The grains declined amid speculation an end to the tax subsidy on ethanol production in the U.S. may slow demand for corn, increasing supply of feeds for livestock and hogs. --With assistance from Susan Li and Rishaad Salamat in Hong Kong, Candice Zachariahs in Sydney, Kristine Aquino in Singapore and Yumi Teso in Bangkok. Editor: Sandy Hendry To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net. To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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