Yen Rises

The yen rose for a second day against the dollar as a decline in stocks led investors to sell higher-yielding assets and pay back low-cost loans funded in the Japanese currency.

Japan's yen also advanced against the Brazilian real and the South African rand on speculation carry trades will unwind. The U.S. has entered a recession that will persist into next year, and economies around the world will contract, a survey of business economists indicated.

The dollar dropped 0.3 percent to 96.81 yen at 10:14 a.m. in New York, from 97.14 on Nov. 14. The U.S. currency decreased 0.5 percent to $1.2662 per euro from $1.2605. The yen traded at 122.53 per euro, compared with 122.39.

The yen gained 2.8 percent to 41.91 against the real and 0.5 percent to 9.5411 versus the rand on speculation investors will reduce trades in which they get funds in a country with low borrowing costs and buy assets where returns are higher. Japan's 0.3 percent target lending rate compares with 13.75 percent in Brazil and 12 percent in South Africa.,
11/17/2008 7:42:06 AM