By Ye Xie Nov. 20 (Bloomberg) -- The yen rose against the dollar and the euro for a second day as a surprise increase in U.S. initial jobless claims prompted speculation that investors will sell higher-yielding assets and pay back low-cost loans in Japan. The Swiss franc fell to the lowest against the dollar since July 2007 after the central bank unexpectedly halved its target lending rate to 1 percent. South Korea's won was the biggest loser, tumbling to the weakest level in more than 10 years as the global recession reduced demand for emerging-market assets. ``Risk appetite won't recover any time soon,'' said Robert Blake, a senior currency strategist in Boston at State Street Global Markets LLC, which has $15.3 trillion in assets under custody. ``We are in a deep recession, and it has a long way to go. The yen is the biggest safe-haven currency.'' The dollar dropped 1.4 percent to 94.40 yen at 9:25 a.m. in New York, from 95.73 yesterday. The euro declined 0.8 percent to 118.66 yen from 119.55. The euro increased 0.6 percent to $1.2568 from $1.2489. First-time claims for U.S. unemployment insurance unexpectedly rose last week to the highest level since 1992. The number of people staying on benefit rolls the prior week rose to 4.012 million, the most since December 1982, the Labor Department reported today. Futures on the Standard & Poor's 500 Index dropped 2.5 percent after the jobs data. The index and the Dow Jones Industrial Average slid yesterday to their lowest levels since March 2003. To contact the reporter on this story: Ye Xie in New York at yxie6@bloomberg.net

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