The euro strengthened for a third day against the yen as European Union finance ministers meet in Brussels a day after agreeing to release 3 billion euros ($3.9 billion) of aid for Greece. The dollar and yen weakened against most other major peers as Federal Reserve Chairman Ben S. Bernanke prepares to speak tomorrow and Bank of Japan officials are set to begin a two-day meeting. The Swiss franc weakened versus all but one of its 16 leading counterparts. The pound dropped to the lowest level in almost four months against the euro after a report showed U.K. manufacturing unexpectedly shrank in May. “What we’re seeing now is just a natural rebound,� said Neil Mellor, a currency strategist at Bank of New York Mellon in London. “We’re approaching summer markets so there’s a degree of saying that’s done, the Greek issue is resolved, we can perhaps stop selling the euro quite so heavily and take a degree of respite.� The euro strengthened 0.3 percent to 130.28 yen at 11:12 a.m. London time. It has fallen from 133.80 yen, this year’s high, on May 22. The 17-nation currency was little changed at $1.2862 after climbing to $1.3711 on Feb. 1. The dollar rose 0.3 percent to 101.28 yen. Greece will get 2.5 billion euros this month and the rest in October, as long as Prime Minister Antonis Samaras’s tottering coalition delivers on economic reforms and spending cuts. Greece can also count on recouping 2 billion euros in central-bank profits on Greek bonds and on 1.8 billion euros from the International Monetary Fund. Macro Dynamic The Swiss franc fell as investors sought higher-yielding assets. It depreciated 0.5 percent to 96.83 centimes per dollar after reaching 96.85 centimes, its weakest since May 29. It slipped 0.4 percent to 1.2455 per euro. The 17-nation shared currency has gained 4.5 percent this year, the second-best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has risen 7.5 percent, while the yen is the biggest loser, dropping 9.5 percent. “The macro dynamic and monetary policy dynamic are still suggesting yen weakness is the game to be playing,� Sacha Tihanyi, a currency strategist at Scotiabank in Hong Kong, said in a Bloomberg Television interview. “We’re still looking for 105 by the end of this year,� Tihanyi said in reference to the dollar-yen exchange rate. Bank of Japan Governor Haruhiko Kuroda and his fellow policy makers will discuss upgrading their assessment of Japan’s economy by using the word “recover� for the first time in more than two years, people familiar with the central bank’s discussions said. Smooth Volatility Last month, BOJ officials refrained from extending the length of loans they use to smooth volatility and stuck with a pledge from April to increase the monetary base by 60 trillion yen to 70 trillion yen per year. Norddeutsche Landesbank, Macquarie Bank Ltd. and Banco Santander SA are all calling for the yen to tumble to 110 per dollar by year-end. The lenders are among the five top-ranked forecasters for the currency last quarter, according to data compiled by Bloomberg. The median estimate of economists in a Bloomberg survey calls for 105 by Dec. 31. Britain’s currency dropped as factory output data cast doubt on the strength of the recovery in the second quarter. Production fell 0.8 percent from April, when it declined 0.2 percent, the Office for National Statistics said today in London. The median forecast of 25 economists in a Bloomberg News survey was a 0.4 percent increase. Sterling slid 0.6 percent to $1.4860 and declined 0.6 percent to 86.56 pence per euro after touching 86.69, the weakest level since March 14. To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net.

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