The euro weakened for a second day against the yen after the leaders of Germany and France rejected calls for a joint-bond plan to stem the region’s debt crisis and amid signs growth is slowing. The 17-nation currency extended yesterday’s decline against the dollar before a report today that economists said will show European inflation slowed in July. The Swiss franc appreciated against all its major counterparts even as the central bank said it will take further measures if needed to combat the currency’s strength. The dollar fell against the yen before reports this week forecast to show U.S. price pressures are easing. “European leaders haven’t addressed the underlying problem of deficits in the individual countries, and the exposure for banks and the crisis is set to bubble on,” said Derek Mumford, a Sydney-based director at Rochford Capital, a foreign-exchange and rates risk management firm. “Everything that’s going on in Europe would make it the sickest one at the moment. The euro is possibly at the top end of its range.” The euro weakened 0.7 percent to 109.93 yen as of 8:19 a.m. in London, after slipping 0.3 percent yesterday. It dropped to $1.4344, from $1.4407 yesterday, when it lost 0.3 percent. The dollar slipped to 76.65 yen from 76.80. The franc gained 1.6 percent to 1.12812 versus the euro. It strengthened 1.2 percent against the dollar to 78.65 centimes. German Chancellor Angela Merkel and French President Nicolas Sarkozy rebuffed a proposed euro-area bond plan as well as an expansion of the region’s 440 billion-euro ($632 billion) rescue fund. A plan to resubmit a proposal for a financial- transaction tax, which the European Union rejected in 2010, sent U.S. stocks lower yesterday. The Swiss National Bank aims to expand banks’ sight deposits to 200 billion francs ($254 billion) from 120 billion francs, according to an e-mailed statement today. It said it will also employ foreign-exchange swaps and is ready to take more measures if needed. To contact the reporters on this story: Keith Jenkins in London at kjenkins3@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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