Yen Declines as Japan Holds Interest Rate


The yen fell against 16 of the most- traded currencies as Bank of Japan Governor Toshihiko Fukui said there was no set time for raising interest rates.

Japan's yen weakened more than 2 percent against the currencies in New Zealand and Australia after the BOJ held its overnight lending rate. The decline started after Japanese Prime Minister Yasuo Fukuda warned about the yen's fast advance in a Financial Times interview. The dollar fell versus 13 of 16 major currencies after a United Arab Emirates central bank official said the country's dollar peg was at a ``crossroads.''

The yen fell 0.7 percent to 110.17 per dollar at 9:09 a.m. in New York, after rising to as high as 109.13 yesterday, the strongest level since May 17, 2006, as credit-loss concern pushed investors to trim higher-yielding assets funded by loans in Japan. The yen declined 1.3 percent, the most since September, to 161.07 per euro.

Investors bought higher-yielding currencies in Canada, Brazil and South Africa where interest rates are between 10.75 and 4 percentage points more than Japan's 0.5 percent borrowing cost, the lowest among major economies.


TradingEconomics.com, Bloomberg
11/13/2007 7:12:16 AM