The euro strengthened for a fifth day against the dollar as European Union chiefs pledged to seek a joint strategy for handling failing banks, boosting demand for the region’s assets. The 17-nation currency rose to the strongest in eight months against the yen as EU leaders agreed to start work next year on a single resolution mechanism for euro-area banks to complement the European Central Bank’s oversight role approved yesterday by finance chiefs. The yen fell to the weakest since March against the dollar as Japanese business confidence slid to the lowest in almost three years, adding to the case for more central bank easing. The euro gained 0.2 percent to $1.3102 at 7:52 a.m. London time, extending this week’s advance to 1.4 percent. The common currency rose 0.3 percent to 109.69 yen after reaching 109.98, the highest since April 2. The yen fell 0.1 percent to 83.73 per dollar after dropping to 83.96, the weakest since March 21. The BOJ said its Tankan index for large companies fell to minus 12 in December from minus 3 in September, the lowest since March 2010. A negative figure means the number of pessimists outnumber the optimists. To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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