The yen rose against the dollar for the first time in three days as evidence the U.S. economic slump is deepening fueled the Japanese currency’s appeal as a haven. The dollar declined as U.S. initial jobless claims rose last week to a 26-year high. Russia’s ruble slid to its lowest level against the dollar in almost two years after it was devalued for the third time in a week. The euro advanced closer to parity versus the pound for the first time. “At least in the first half of next year, the yen will strengthen against the dollar,” said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut, in an interview on Bloomberg Television. “There’s demand from domestic investors and foreign investors.” The yen increased 0.5 percent to 90.55 per dollar at 11:13 a.m. in New York, from 90.98 yesterday. Japan’s currency reached a 13-year high of 87.14 on Dec. 17. The yen traded at 126.78 versus the euro, compared with 126.72 yesterday. The euro climbed 0.5 percent to $1.3999 from $1.3928. The euro gained 0.4 percent to 94.96 pence. Russia’s ruble weakened 0.9 percent to 28.6925 against the dollar and dropped 1.4 percent to 40.1569 versus the euro after the central bank allowed the currency to slide. Crude oil fell below $38 a barrel, dimming the outlook for economic growth. South Korea’s won gained 2.3 percent to 1,307.30 per dollar, appreciating 12 percent in December after falling every month since July. South Korea has signed swap deals with the U.S., China and Japan, giving access to dollars to help ease a funding shortage for domestic companies. Yen Versus Aussie Against the Australian dollar, the yen strengthened to 61.58, from 61.90 yesterday in New York. It also appreciated to 133.66 versus the British pound from 133.97. “Trading is very thin today,” said Paul Bednarczyk, a currency strategist in London at 4Cast Ltd., which counts central banks among its subscribers. “It’s a typical Christmas Eve. This is the level we left it last night, and I expect this is the level where we’ll find it when we come back on Monday morning.” The yen gained 29 percent against the euro and 24 percent against the dollar this year as a global recession and a seizure in credit markets prompted Japanese investors to avoid riskier assets and repatriate overseas earnings. Japan’s currency was on course for a 59 percent advance against the Australian dollar and a 66 percent surge versus the pound this year as the collapse of Lehman Brothers Holdings Inc. and a stock market rout prompted investors to repay yen loans used to fund purchases of higher-yielding overseas assets. Fed’s Zero Rate The dollar fell to the lowest level in almost three months versus the euro last week as the Federal Reserve cut the overnight target rate to a range of zero and 0.25 percent from 1 percent and said it may keep rates low for “some time.” “The dollar has no interest-rate advantage, so it’s particularly vulnerable against the euro,” said Tetsu Aikawa, deputy general manager of the capital markets division at Shinsei Bank Ltd. in Tokyo. “The problems the U.S. economy is facing will remain for some time.” The number of Americans filing first-time claims for unemployment insurance last week rose, indicating employers are stepping up job cuts as the recession deepens. Initial jobless claims increased more than forecast to 586,000, the most since November 1982, from a revised 556,000 the prior week, the Labor Department said today in Washington. The four-week moving average of claims, a less volatile measure, also was the highest since 1982. BlackRock Fund Japan’s currency also advanced today after Moody’s Investors Service said a BlackRock Inc. fund that invests in high-yield, high-risk loans may default. Moody’s cut ratings on portions of BlackRock Senior Income Series III collateralized loan obligations, citing “deterioration in the market value of the underlying collateral pool,” the ratings company said in a statement yesterday. “Investors are still risk-averse, given there’s a global recession under way,” said Yuji Saito, head of the foreign- exchange group at Societe Generale SA in Tokyo. “The bias is for the yen to be bought.” The yen may advance to 90 against the dollar and 126 per euro today, Saito forecast.

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