Yen Rises

The yen rose to the highest level in five months against the euro and rallied versus the dollar as a decline in stocks prompted traders to pare holdings of higher- yielding assets funded in the Japanese currency.

The yen climbed to its strongest level in almost a month against the dollar as Hurricane Gustav approached the Gulf of Mexico, halting most oil and natural-gas output from the region. The currency stayed higher after Japanese Prime Minister Yasuo Fukuda resigned. The pound fell to a record low against the euro after Chancellor of the Exchequer Alistair Darling said the British economy faces the worst slump in 60 years.

The yen rose to 157.56 per euro, the strongest level since April 1, before trading at 157.75 at 1:52 p.m. in London, from 159.65 in New York on Aug. 29. Japan's currency climbed to 107.63 per dollar, the strongest since Aug. 4, before trading at 107.94 yen, from 108.80. The euro slid to $1.4613, from $1.4673.

Currency trading may be below usual levels because U.S. financial markets are closed today for a public holiday.

Stocks in Europe and Asia fell as rising oil prices dimmed the earnings outlook for airlines and weaker consumer spending weighed on technology companies. Europe's Dow Jones Stoxx 600 Index slipped 0.4 percent. The MSCI Asia Pacific Index lost 1.8 percent.

Yen Rises,
9/1/2008 6:30:25 AM