The yen and the dollar rose against the euro on speculation European finance ministers will today reiterate the global recession is far from over, spurring demand for the relative safety of the U.S. and Japanese currencies.
The yen advanced versus all 16 of the most-traded currencies as Asian stocks declined, prompting investors to reduce holdings of higher-yielding assets. Japan’s currency approached a two-week high against the euro after Luxembourg Finance Minister Jean-Claude Juncker said at a meeting of euro- area counterparts in Brussels yesterday that "we are still in the middle" of the worldwide financial crisis.
Juncker's comments in Brussels yesterday came after the Organization for Economic Cooperation and Development said last month signs of a recovery in the 16-nation euro area were not clear. The OECD cut its 2009 forecast for the region’s economy to a contraction of 4.8 percent, from a decline of 4.1 percent projected in March, and said the ECB should lower its benchmark interest rate from 1 percent.
The yen rose to 132.41 per euro as of 7:42 a.m. in London from 133.34 yesterday in New York, when it advanced to 131.74, the highest since June 23. The dollar climbed to $1.3921 per euro from $1.3984, after yesterday reaching $1.3877, also the strongest since June 23. The dollar bought 95.10 yen from 95.35.
The pound declined to $1.6190 as of 7:46 a.m. in London, from $1.6286 yesterday, the first time it dropped for four consecutive days since April 10. It weakened to 85.97 pence per euro, from 85.85 pence.
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