NEW YORK (Bloomberg) — The dollar advanced for the first time in three weeks against the yen on evidence of a global economic recovery including a surge in the US housing market before next week's Federal Reserve policy meeting.

The euro touched its weakest level in almost a year against the dollar before Greece asked the European Union and the International Monetary Fund yesterday to activate a bailout of as much as 45 billion euros ($60 billion). The yen fell against all of its major counterparts this week as central banks signaled they will begin increasing borrowing costs to contain inflation, encouraging demand for higher-yielding assets.

"There's lots of good data in the US and globally, and that's keeping the yen on the back foot," said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York. "The aid package for Greece is a temporary stop-gap. The combination of strong US numbers, a more upbeat Fed and sovereign concerns in Europe means it's just a matter of weeks before the euro breaks $1.30."

The dollar increased 2 percent to 93.97 yen, from 92.17 on April 16. The euro declined 0.9 percent to $1.3384, from $1.3503 last week. It touched $1.3202 yesterday, the lowest level since April 30, 2009. The euro appreciated 1 percent to 125.73 yen, from 124.44 yen.

New Zealand's dollar gained 3.2 percent to 67.40 yen and Mexico's peso increased 2.8 percent to 7.72 yen this week on speculation investors will increase carry trades, in which they buy higher-yielding assets with amounts borrowed in nations with low interest rates. Japan's benchmark of 0.1 percent has made the yen popular for funding such transactions.

Yuan forwards touched a three-month high on April 22, before yesterday's meeting of Group of 20 finance chiefs in Washington. The officials called in a statement for "credible" plans to withdraw economic stimulus as the recovery gains momentum and Greece's fiscal turmoil highlights the risks posed by mounting government debt.

Treasury Secretary Timothy Geithner earlier this month called the talks an "avenue for advancing US interests" on the Chinese currency.

Twelve-month non-deliverable yuan forwards ended the week at 6.6115 per dollar, compared with 6.6185 on April 16. The contracts reached 6.5930 on April 22, reflecting bets that the currency will strengthen about 3 percent.

The dollar rose to the strongest level in two weeks versus the yen yesterday as government reports showed US new-home sales rose in March by the most in almost five decades and orders for durable goods surged.

New-home sales rose 27 percent in March, the most since April 1963, and orders for US durable goods excluding transportation items gained 2.8 percent, the Commerce Department reported. The median forecast of 75 economists in a Bloomberg News survey was for a 0.7 percent advance in bookings for goods meant to last at least three years.

The housing number was "incredible," and the durable- goods report was "strong," said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp., the world's largest custodial bank, with more than $20 trillion in assets under administration. "These reports will send the FOMC back to the drawing board to fine-tune the interest rate trajectory."