The yen advanced 0.4 percent to 125.06 per euro at 4:03 p.m. in New York, from 125.60 yesterday. It touched 123.43, the strongest level since December 2002. Japan's currency rose 0.8 percent to 96.93 per dollar from 97.66. The U.S. currency dropped 0.3 percent to $1.2899 per euro from $1.2855 after reaching $1.2728, the strongest level since November 2006.
The yen gained 3.6 percent to 63.44 against the Australian dollar and 2.3 percent to 155.36 versus the pound on speculation investors will unwind carry trades, in which they get funds in a country with low borrowing and buy assets where returns are higher. Japan's 0.5 percent target lending rate compares with 4.5 percent in the U.K. and 6 percent in Australia.
Sterling slid to the lowest level against the dollar in more than five years after the Office for National Statistics said today that retail sales in the U.K. declined 0.4 percent in September after rising 1.1 percent in the prior month. The pound dropped 0.8 percent to $1.6131 after touching $1.6042, the lowest level since September 2003. It slid yesterday as much as 3.4 percent, the biggest intraday decline since September 1992, when investor George Soros drove the currency out of Europe's system of linked exchange rates.
The ruble fell as much as 0.5 percent to 27.0664 per dollar, the weakest level in more than two years, before ending the day little changed. S&P cut the outlook for Russia's BBB+ credit rating to ``negative'' from ``stable,'' saying the country's rating could be downgraded if the cost of the government's bank rescue increases.
Brazil's real rose, erasing a decline of as much as 5.8 percent, as the central bank bought the currency to stem a two- month rout and said it's prepared to sell as much as $50 billion of currency swaps. The real gained 5 percent to 2.2608 per dollar. The currency has lost 21 percent in the past month.
Canadian dollar dropped to the lowest in four years on speculation worldwide economic growth will slow as U.S. investors sell assets. The loonie, as the currency is known because of the aquatic bird on the one-dollar coin, is poised for a fourth straight weekly decline, its longest losing streak in almost a year. The currency has lost 15 percent this month as commodities including crude oil have plummeted.
The Canadian dollar depreciated by as much as 1.6 percent to C$1.2743 per U.S. dollar, the lowest since Oct. 4, 2004. It weakened 3.2 percent yesterday to C$1.2539, its biggest one-day decline since at least 1971 when Bloomberg records begin. The currency has dropped 6 percent since Oct. 17. It fell six straight weeks to Dec. 14. It traded at C$1.2572 at 2:40 p.m. in Toronto. One Canadian dollar buys 79.55 U.S. cents.