The euro fell against the yen before data that economists said will show industrial production dropped in Germany, stoking concern Europe’s debt crisis is hurting the region’s biggest economy. German factory output, adjusted for seasonal swings and inflation, probably fell 0.8 percent in June from the previous month, when it gained 1.6 percent, according to median estimate of economists surveyed by Bloomberg News before the Economy Ministry in Berlin releases its figures today.

Standard & Poor’s revised the outlook on Greece’s sovereign rating to negative from stable and took CreditWatch action on four Spanish banks. The outlook on Greece’s CCC rating, already eight levels below investment grade, was revised to negative from stable, S&P said yesterday in a statement. The change reflects the risk of a downgrade if Greece is unable to obtain the next disbursement from the European Union and International Monetary Fund rescue package, the ratings company said.

Demand for the yen was limited as the Bank of Japan started a two-day policy meeting today amid speculation it may take steps to drive interest rates lower. The Bank of Japan (8301) board will leave unchanged its 45 trillion yen ($573 billion) asset-purchase fund and the benchmark rate target between zero and 0.1 percent, according to all 22 analysts in a Bloomberg survey.

EUR / USD: during the Asian session the pair was traded in range $1.2375-$1.2400.

GBP / USD: during the Asian session the pair was traded in range $1.5600-$1.5620.

USD / JPY: during the Asian session the pair dropped below Y78.50.

European data for Wednesday starts at 0600GMT with the German trade balance for June, which us expected to come in at a seasonally-adjusted reading of E14.5 billion. France data sees the 0630GMT release of the BdF business survey and 0645GMT release of

foreign trade data.  European data rounds off at 1000GMT with Germany industrial output, which is expected to come in at -0.9% m/m, -0.1% y/y, while also in Europe on Wednesday, Germany re-opens its 10-year benchmark 1.75% July 2022 Bund issue for up to E4 billion. UK data is focused on the Bank of England Quarterly Inflation Report from 0930GMT, including the press conference with Bank of England

Governor Mervyn King.