Yen Falls


The yen declined for a second day against the euro on speculation China's $586 billion stimulus package will give investors more confidence to buy higher- yielding assets using money borrowed in Japan.

The yen fell the most versus the Australian dollar and South African rand as stocks and commodities rose following China's announcement yesterday. The dollar weakened against the euro, pound and Indian rupee after the Group of 20 nations said it's ready to act ``urgently'' to prop up global growth.

The yen fell to 128.16 per euro at 6:35 a.m. in New York from 124.90 in New York on Nov. 7. Against the dollar, it declined to 99.34 from 98.24. The euro rose to $1.2915 from $1.2718. The British pound advanced to $1.5813 from $1.5643.

China's stimulus plan, equivalent to almost a fifth of last year's gross domestic product, is a response to a slump in its major export markets. Japan will contract 0.2 percent next year, the U.S. by 0.7 percent and the euro area 0.5 percent, while China will expand 8.5 percent, the International Monetary Fund said last week, predicting the first simultaneous recession in the U.S., Japan and euro region in the post-World War II era.

Against the South African rand, the yen declined 4.3 percent to trade at 10.0883 rand, from 9.6559. It fell 4.6 percent versus the Australian dollar to 68.38 and 3.3 percent against the New Zealand dollar to 60.03. The three currencies all weakened at least 30 percent against the yen in the past year as a credit-market collapse reduced appetite for risk.


TradingEconomics.com, Bloomberg.com
11/10/2008 5:19:17 AM