BLBG: Yen Advances as Drop in Stocks Reduces Higher-Yield Demand
By Daniel Kruger and Agnes Lovasz
Nov. 12 (Bloomberg) -- The yen rose for a third day against the dollar and advanced versus the euro as a drop in global stocks encouraged investors to sell higher-yielding assets and pay back low-cost loans in Japan.
The pound fell to a record low against the euro for a third day after the central bank said the British economy will shrink through most of next year as a result of the global credit freeze. The dollar touched a two-week high against the euro on increased demand for the safety of U.S. assets.
``The correlations look high enough between negative equities and upside dollar and yen moves,'' said Dustin Reid, senior foreign-exchange strategist at RBS Greenwich Capital Markets in Chicago. ``It seems to be a solid enough trend.''
The yen increased 1.1 percent to 96.57 per dollar at 9:20 a.m. in New York, from 97.65 yesterday. Japan's currency increased 1.2 percent to 120.79 per euro from 122.27. The euro was at $1.2503, compared with $1.2522, after reaching $1.2477, the lowest level since Oct. 28.
To contact the reporters on this story: Daniel Kruger in New York at dkruger1@bloomberg.net; Agnes Lovasz in London at alovasz@bloomberg.net
