The euro weakened for a second day, falling to an 11-year lowagainst the yen, as France prepared to sell bills after Standard& Poor's stripped the nation of its top credit rating and cuteight other euro-region nations.

Japan's currency gained against all 16 of its major peerstracked by Bloomberg as concern that Europe's fiscal turmoil willintensify boosted demand for haven assets. Greek officials willreconvene with creditors on Jan. 18 after discussions stalled lastweek over the size of investor losses in a proposed debt swap.Asian currencies weakened before a report tomorrow that may showChina's economy expanded at the slowest pace since the secondquarter of 2009.

“The ratings downgrade provides more evidence that the euro-zonesovereign debt crisis has a lot further to run,” said Lee Hardman,a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. inLondon. “The fundamentals still argue in favor of a continuedadjustment lower in the euro.”