Yen Falls

The yen fell against the euro and the dollar for the first time in three days as stock gains fueled speculation investors will be slower in selling higher- yielding assets funded by low-cost loans in Japan.

Israel's shekel fell to the lowest level against the dollar in almost a year as investors bet the central bank will lower its benchmark interest rate further this month. The yen also dropped against the Australian and New Zealand dollars.

The yen dropped 0.6 percent to 122.69 against the euro at 10:31 a.m. in New York, from 121.99 yesterday. Japan's currency fell 0.6 percent to 96.99 versus the dollar, from 96.43. The dollar traded at $1.2655 per euro, compared with $1.2650.

The ICE's Dollar Index, a gauge of the greenback against the euro, the yen, the pound, the Canadian dollar, the Swiss franc and Sweden's krona, rose to 86.987 from 86.807 yesterday. The index reached 88.147 on Nov. 13, the highest level since April 2006, as investors sought safety in U.S. assets.

International demand for U.S. financial assets rose more than economists forecast in September as China surpassed Japan to become the biggest foreign holder of Treasuries.

The yen dropped 0.6 percent to 62.95 against the Australian dollar and 0.4 percent to 53.28 versus New Zealand's currency on speculation carry trades, in which investors get funds in a country with low borrowing costs and buy assets where returns are higher, will unwind at a slower pace.,
11/18/2008 8:24:43 AM