Euro Falls to 10-Year Low Against Yen

The euro weakened to a decade low against the yen and Italian bonds fell as the nation raised less than its maximum target at a debt auction. U.S. equity-index futures gained while gold retreated. The euro decreased 0.7 percent to 100.16 yen at 7:08 a.m. in New York. The yield on Italian 10-year bonds climbed seven basis points to 7.07 percent. Standard & Poor’s 500 Index futures rose 0.2 percent and the Stoxx Europe 600 Index was little changed. Gold declined to a five-month low. “Yield levels around 7 percent are absolutely not sustainable,” saidMichael Markovic, a senior fixed-income strategist at Credit Suisse Group AG in Zurich. “They could not sell the entire size they planned. It’s not positive news for the stressed sovereign-debt markets in theeuro zone.”

The euro slid for a fifth day against the yen, falling to the weakest level since June 2001. The 17-nation currency slipped 0.6 percent to $1.2862, the lowest since September 2010. “The ECB, for the foreseeable future, will not drain liquidity once per month as it always has done,” said Robert Rennie, Sydney-based chief currency strategist at Westpac Banking Corp., Australia’s second-largest lender. “It gives you greater confidence that this is more formal quantitative easing. Both on an outright and a cross basis, the risks still do lie to the downside for the euro.”

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