The currency rose against the Australian and New Zealand dollars, two favorite targets of such trades, in which investors borrow in nations with low interest rates and buy higher- yielding assets elsewhere. It stayed higher as the Group of Seven nations expressed concern about excessive yen movements and Japan Finance Minister Shoichi Nakagawa said his country is ready to act.
The yen rose to 92.80 per dollar as of 7:32 a.m. in London, from 94.32 in New York on Oct. 24. It touched a 13-year high of 90.93 on Oct. 24. Japan's currency strengthened to 115.66 per euro from 118.96 at the end of last week, when it reached 113.81, the strongest level since May 2002. The euro fell to $1.2470 from $1.2623. The yen may appreciate to around 90 per dollar today, Amikura forecast.
Japan's currency has jumped this month by 14 percent against the greenback, 29 percent versus the euro, 49 percent against the Australian dollar and 40 percent versus the New Zealand dollar as traders slashed carry trades. Japan's benchmark rate of 0.5 percent compares with 6 percent in Australia and 6.5 percent in New Zealand.
Australia's central bank bought the country's currency for a second day to arrest a 35 percent drop in the past three months as prices slumped for commodities that generate 70 percent of the nation's export earnings. Australia's dollar plunged 31 percent against the yen and 22 percent versus the greenback this month as investors bought back currency borrowed in carry trades.
The Australian dollar pared declines after the RBA acted today, trading down 0.2 percent at 62.11 U.S. cents at 2:42 p.m. in Sydney, from 62.23 cents on Oct. 24 late in New York. It earlier fell as low as 61.26 cents, close to the five-year low of 60.57 touched on Oct. 24. The Australian currency dropped as much as 3.9 percent to 56.38 yen and traded at 58.36 yen, down 0.5 percent from the end of last week.
India's rupee fell to a record low on speculation a stocks rout and global recession concerns will prompt investors to slash holdings of emerging-market assets. he rupee dropped as much as 0.6 percent to 50.275 against the dollar, an all-time low, before trading at 50.2375 as of 1:37 p.m. in Mumbai, according to data compiled by Bloomberg. It has weakened more than 21 percent this year, making it the worst performer after South Korea's won among the 10 most-active currencies in Asia outside Japan.
The yuan was little changed after People's Bank of China Governor Zhou Xiaochuan said the nation will keep its currency stable amid the global financial crisis. The yuan traded at 6.8460 per dollar in Shanghai as of 1:16 p.m., compared with 6.8433 on Oct. 24, according to the China Foreign Exchange Trade System. The rate was little changed from 6.8485 a dollar at the end of last month.