The yen weakened for a second day versus the dollar and declined against the euro after a report showed Japanese investors increased purchases of overseas bonds to the most in a month. Japan's Ministry of Finance said local investors bought 982 billion yen ($10.2 billion) more overseas bonds than they sold last week.
The pound fell for a second day versus the dollar before the Bank of England announces its policy decision at noon in London. Governor Mervyn King’s forecasts last month showed it needs to spend 125 billion pounds ($204 billion) of newly printed money in U.K. debt markets to combat the recession.
The yen dropped to 136.59 per euro as of 7:34 a.m. in London, from 135.93 in New York yesterday, when it fell to 138.00, the weakest level since Oct. 20. The yen declined to 96.17 per dollar from 95.99. The U.S. currency fell to $1.4203 per euro from $1.4162 yesterday, when it slid to $1.4338, the lowest this year. The pound dropped to $1.6294 from $1.6317.
Gains in the euro against the dollar may be limited on speculation European Central Bank policy makers also meeting today will take further steps to keep down borrowing costs in the 16-nation region as optimism over the global recovery wanes.
