The euro erased its advance against the dollar amid concern that a deal to bail out Cyprus won’t be enough to eliminate the threat of default and stave off contagion to other euro-region nations. Europe’s shared currency pared an advance versus the yen after the provisional agreement that would make Cyprus the fifth country to tap a rescue since the euro crisis began in 2009. The bailout accord will see Cyprus Popular Bank Pcl wound down, wiping out bondholders, and will also impose losses on some depositors at Bank of Cyprus Plc. (BOCY) Japan’s currency weakened against all its 16 major peers before central bank Governor Haruhiko Kuroda speaks to lawmakers tomorrow. “The overarching concern is capital flight and not just from Cyprus,� said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “This deal underlines the structural problems in the euro region. I wouldn’t be surprised to see the euro fall unless policy makers do something else to shore up confidence.� The euro was little changed at $1.3003 as of 8:27 a.m. in London, after reaching $1.3048, the strongest level since March 15. Europe’s shared currency rose 0.3 percent to 123.10 yen, paring an advance of as much as 0.9 percent. Japan’s currency depreciated 0.2 percent to 94.67 per dollar. To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net To contact the editors responsible for this story: Robert Burgess at bburgess@bloomberg.net; Rocky Swift at rswift5@bloomberg.net

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