Yen Reaches Strongest Since 2005

The yen reached the strongest since May 2005 against the dollar as concern mounted that the U.S. is headed for recession., Bloomberg 1/19/2008 1:02:51 PM

The Japanese currency gained against all of the 16 most- actively traded currencies this week as a U.S. manufacturing index fell to a six-year low. The Standard & Poor's 500 Index of shares had its biggest weekly loss in five years, sapping investors' confidence in assets tied to global growth prospects.

The yen rose 1.8 percent this week to 106.87 per dollar, and reached 105.92 per dollar on Jan. 16, the strongest since May 2005. Japan's currency rose 2.9 percent this week to 156.20 per euro after touching a four-month high of 155.70 yesterday. The dollar ended a three-week slide, gaining 1.1 percent to $1.4621 per euro.

The Philadelphia Federal Reserve Bank's general economic index declined to -20.9 this month, the lowest since October 2001, from -1.6 in December, the bank said Jan. 17. Negative readings signal contraction.

Japan's currency gained as global stocks tumbled. The S&P 500 index lost 5.4 percent this week, its steepest drop since July 2002.

Yen Reaches Strongest Since 2005