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The euro held a three-day decline against the yen amid concern Europe’s sovereign-debt crisis will push up borrowing costs and damp economic growth in the region.

The 17-nation currency is set to drop against 15 of its 16 most-traded peers this month before Italy auctions securities today. A report tomorrow may show Italian business confidence dipped to the lowest level in almost two years. Demand for the dollar as a refuge was limited as U.S. data signaled a recovery in the world’s biggest economy is gaining momentum. South Korea’s won traded near a one-week low as confidence among the nation’s manufacturers dropped to the least in 30 months.

“You can’t be optimistic about the Italian debt sales and I don’t expect very good results to come out,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin-trading services. “The euro continues to face downward pressure.”

The euro was at 101.62 yen at 1:40 p.m. in Tokyo from 101.80 yesterday in New York. The currency bought $1.3067 from $1.3071. The dollar fetched 77.77 yen from 77.88.

IntercontinentalExchange Inc.’s Dollar Index (DXY), which tracks the greenback against the currencies of six major U.S. trading partners, was little changed at 79.832 after a two-day drop.

Italy is scheduled to sell 9 billion euros ($11.8 billion) of 179-day bills and as much as 2.5 billion euros of zero-coupon 2013 securities today. It will auction as much as 8.5 billion euros of debt due in 2014, 2018, 2021 and 2022 tomorrow.

Italian Yields, Confidence
The nation’s 10-year bond yields yesterday climbed two basis points, or 0.02 percentage point, to 7 percent, the level that spurred Greece, Ireland and Portugal to seek bailouts.

Italian business confidence probably dropped to 93.7 this month from 94.4 in November, according to the median estimate of economists surveyed by Bloomberg News before the figures are released tomorrow. That would be the least since January 2010.

Consumers in the euro area’s third-biggest economy spent 48 euros less per person this holiday season than the average of the past five years, Rome-based consumer group Codacons said in a statement on its website.

“The European economy risks a recession,” Ueda Harlow’s Yamauchi said. “Austerity measures will certainly hurt.”

The dollar has lost 0.2 percent in the past week, the third-worst performer among the 10 developed nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

U.S. Economy
Pending sales of previously owned homes in the U.S. probably rose 1.5 percent in November, according to the median estimate of economists surveyed by Bloomberg before a report tomorrow from the National Association of Realtors. The gauge rose 10.4 percent in October.

A measure of U.S. consumer confidence increased to 64.5 this month from a revised 55.2 reading in November, according to data yesterday from the Conference Board, a New York-based private research group. The figure exceeded all estimates in a Bloomberg survey and was the highest since April.

“Strength in the U.S. data is being somewhat supportive in helping offset some of the negative sentiment around Europe when it comes to risk assets,” said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in Sydney.

South Korea’s currency was 0.2 percent from its lowest level in a week after the Bank of Korea said an index measuring manufacturers’ expectations for January dropped to 79 from 83 for December. That’s the lowest level since July 2009.

The won traded at 1,157.96 per dollar from 1,158.67 yesterday, when it slid to as low as 1,160.09, the least since Dec. 20.