Yen Trades Near One-Week Low Versus Euro as Stock Gains Spur Risk Demand

The yen traded near its lowest in almost a week against the euro on speculation Asian stocks will rise on signs the global economic recovery is picking up, boosting demand for higher-yielding assets.

Japan’s currency was near a two-month low against the dollar before reports today that may show European retail sales rebounded and U.S. payrolls gained. The euro trimmed its weekly loss after the European Central Bank bought more government bonds to prevent a regional debt crisis from spreading.

“Economies, especially in the U.S., seem to be improving,” said Marito Ueda, senior marketing director at FX Prime Corp., a foreign-exchange margin company in Tokyo. “Risk- seeking sentiment may be firm and the yen may be sold.”

The yen traded at 110.72 per euro as of 8:33 a.m. in Tokyo from 110.73 in New York yesterday, when it touched 111.19, the lowest level since Nov. 29. It bought 83.83 per dollar from 83.82, after reaching 84.41 on Nov. 29, the lowest since Sept. 27. The euro fetched $1.3214 from $1.3209 and was poised for a 0.2 percent loss this week.

The MSCI Asia-Pacific excluding Japan Index of shares gained 0.2 percent after the Standard & Poor’s 500 Index rose 1.3 percent yesterday.

Retail sales in the 16-nation euro area rose 0.2 percent in October from September, when they slipped a revised 0.1 percent, according to economists surveyed by Bloomberg News before the European Union’s data today. U.S. employers added 150,000 workers last month after a 151,000 gain in October, a separate Bloomberg survey showed before the Labor Department report today.

China’s Economy

China’s manufacturing grew at a faster pace for a fourth straight month in November. The Purchasing Managers’ Index rose to 55.2 from 54.7 in October, China’s logistics federation said this week. The China Federation of Logistics and Purchasing will release today its report on the nation’s non-manufacturing industries for November.

The European Central Bank bought Irish and Portuguese government bonds yesterday, according to three traders with knowledge of the transactions. The ECB also purchased Greek debt, said one of the people, who asked not to be identified because the deals are confidential. An ECB spokesman in Frankfurt declined to comment.

The ECB kept its benchmark interest rate at a record low of 1 percent at the monthly policy meeting yesterday and extended an emergency loan program to combat “acute” market tensions. President Jean-Claude Trichet said the bond-buying program is ongoing while he refrained from announcing new measures to curb the debt crisis. Trichet declined to say whether the central bank stepped up purchases yesterday.

To contact the reporter on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Ron Harui in Tokyo at rharui@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.