The yen declined to a three-week low against the euro as signs of profit growth at U.S. companies damped demand for the relative safety of Japan’s currency. The euro dipped against the dollar as Intel Corp. reported record second-quarter sales and topped analysts’ estimates with its forecast for the coming period. South Korea’s won led gains in Asian currencies as region’s stocks extended a global rally. The pound touched a two-month high. “If we continue to get upside surprises in terms of earnings, then people will buy risk and that will be negative for the yen,” said Adam Cole, head of the global currency strategy at Royal Bank of Canada in London. “But longer-term, people still question whether the global recovery is going to be sustained. We are not bearish yen.” The yen depreciated to 113.28 per euro, the weakest since June 21 before trading at 113.03 as of 8:45 a.m. in London from 112.90 yesterday in New York. Japan’s currency slipped to 88.90 per dollar from 88.74. The euro was at $1.2715 from $1.2724 yesterday when it rose to $1.2739, the strongest since May 12. The pound advanced 0.4 percent to $1.5234, after earlier appreciating to $1.5260, the strongest since May 4. The yen dropped against 14 of the 16 major currencies after Intel, the world’s biggest chipmaker, said yesterday that third- quarter sales will be $11.6 billion, plus or minus $400 million. Analysts had estimated $10.9 billion, according to a Bloomberg News survey. Profit Growth Profits for companies in the Standard & Poor’s 500 Index companies are projected to have increased 34 percent in the second quarter and to advance by the same amount in 2010, according to analysts’ estimates compiled by Bloomberg. The MSCI Asia Pacific Index of shares advanced 1.3 percent after the S&P 500 rose 1.5 percent yesterday, extending its longest rally in three months. Asian currencies rose after a government report showed Singapore’s economy accelerated to a record 18.1 percent pace in the first half, adding to signs the region is shrugging off the European debt crisis. Singapore’s gross domestic product expanded at a 26 percent annualized pace in the second quarter from the previous three months, after a revised 45.9 percent gain in January to March, the trade ministry said. ‘May Be Exaggerated’ Singapore’s growth “should reinforce the view that fears from the euro zone crisis may be exaggerated,” Philip Wee, senior currency economist in Singapore at DBS Group Holdings Ltd., wrote in a research note. “Sentiment should remain constructive, not only for the Singapore dollar, but also other Asia ex-Japan currencies and commodity currencies.” Korea’s won jumped 0.8 percent to 1,202.33 against the greenback, and Singapore’s dollar rose 0.1 percent to S$1.3771 after touching a three-week high of S$1.3733. The euro strengthened for a second day versus the yen after Greece yesterday sold Treasury bills at a lower interest rate than the 5 percent charged by the European Union when it rescued the nation from default. The bills due Jan. 14 were sold at a rate of 4.65 percent, the Public Debt Management Agency in Athens said yesterday. Investors bid for 3.64 times the bills offered, the agency said. “A smooth auction underscored receding worries over the debt problem in the euro zone,” said Masakazu Sato, a foreign- exchange adviser at foreign exchange margin company GaitameOnline Co. in Tokyo. Investor Willingness Prime Minister George Papandreou’s government cut wages, postponed retirements and raised taxes to trim the euro-region’s second-highest budget deficit and restore investor willingness to lend. The pound rallied on signs the U.K. economic recovery is intact. The number of British people claiming jobless benefits dropped 20,000 in June, declining for a fourth month, according to a Bloomberg News survey before today’s data. U.K. consumer prices rose 3.2 percent in June from a year earlier, faster than economists’ estimates, a report showed yesterday. “Sterling gained after higher U.K. core inflation weighed in favor of higher interest rates from the Bank of England,” analysts led by Justin Smirk, Sydney-based chief economist at St. George Bank Ltd., wrote in a research note today. Bank of England policy maker Andrew Sentance reiterated yesterday in a speech in Reading, England, that he favors a “gradual” removal of stimulus rather than any “sudden lurch” that could undermine confidence. To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net; Yasuhiko Seki in Tokyo at yseki5@bloomberg.net;

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