Yen Trades Near One-Week Low Against Euro

The yen traded near a one-week low against the euro as a rally in stocks eased concern credit market losses are deepening and encouraged investors to buy higher-yielding assets funded in Japan., Bloomberg 5/12/2008 7:01:57 PM

The currency may decline for a second day against the dollar as U.S. shares advanced on signs the worst of the credit crisis may be over. The dollar was near a one-week low against the euro before a government report today that economists say will show U.S. retail sales declined, adding to evidence the U.S. economy is slowing.

The yen traded at 161.22 per euro as of 9:31 a.m. in Tokyo, from 161.38 in New York yesterday, when it fell 1.3 percent, the biggest one-day decline since March 18. Japan's currency was little changed at 103.78 per dollar. The euro was at $1.5539 compared with $1.5553.

The yen extended its decline against the dollar after bond insurer MBIA Inc. reported a narrower first-quarter loss than some analysts estimated. The euro was supported after Jean- Claude Trichet of the European Central Bank said current interest-rate policies will keep inflation in check.

The target lending rate is 0.5 percent in Japan, the lowest in the industrialized world. Benchmark borrowing costs are 11.5 percent in South Africa and 7.25 percent in Australia.

Yen Trades Near One-Week Low Against Euro