Yen Trades Near Three-Week Low Against Euro

The yen traded near a three-week low against the euro after a rally in U.S. stocks restored confidence in buying higher-yielding assets funded in Japan.

Japan's currency may fall for a second day against the dollar after a U.S. government report showed inflation rose more than forecast last month, adding to speculation the Federal Reserve will be less aggressive in cutting interest rates. The yen has declined against 15 of the 16 most-active currencies in the past month as a rebound in equities gave investors the incentive to resume so-called carry trades.

The yen traded at 159.01 per euro as of 8:24 a.m. in Tokyo from 159.09 in New York yesterday, when it fell to 159.27, the lowest since Jan. 30. It was also at 108.03 per dollar from 108.12. The dollar traded at $1.4714 per euro from $1.4715.

Yen Trades Near Three-Week Low Against Euro, Bloomberg
2/20/2008 4:26:22 PM