The yen weakened for a third day against the euro as improving economic data and central bank comments that the global recession is abating spurred investors to buy higher-yielding assets.
The euro traded near the strongest level in two weeks against the dollar before a report that economists said will show European industrial orders fell at a slower pace. Asian stocks extended a global rally after Federal Reserve Chairman Ben S. Bernanke said last week chances for near-term growth "appear good." The Australian dollar rose a fifth day, recovering from losses this month amid concern China will slow lending and trim its demand for resources.
The yen fell to 135.90 per euro as of 7:44 a.m. in London from 135.21 in New York on Aug. 21. It earlier declined to 136.09 per euro, the weakest since Aug. 14. The Japanese currency dropped to 94.95 per dollar from 94.38. The dollar traded at $1.4313 per euro from $1.4326.
Australia's currency strengthened 0.5 percent to 83.86 U.S. cents and advanced 1.1 percent to 79.63 yen.
Gold, little changed in Asian trading, may decline after the biggest rally in three weeks spurred investors to sell the precious metal. Gold for immediate delivery dropped as much as 0.3 percent before trading little changed at $953.95 an ounce at 2:22 p.m. in Singapore.
