Italian Bonds Fall Sixth Week; Spanish Yields Surge on Contagion

Italian bonds fell a sixth straight week and debt from Finland to the Netherlands dropped relative to German bunds as European Central Bank purchases of sovereign securities failed to stem the spread of the debt crisis.

Spanish borrowing costs surged to the most in at least seven years as the nation failed to sell the maximum amount of 10-year bonds on offer at an auction. Kokusai Asset Management Co.’s Global Sovereign Open, Japan’s biggest mutual fund, said it sold its entire holdings of Italian government bonds by Nov. 10. German Chancellor Angela Merkel rejected French calls to deploy the ECB as a crisis backstop.