By Yasuhiko Seki and Ron Harui March 23 (Bloomberg) -- The yen fell for the first time in five days against the euro as optimism the global economic recovery is intact spurred gains in stocks and demand for emerging-market assets. The yen weakened versus 15 of 16 major counterparts before reports forecast to show a slowing decline in U.S. home sales and the fastest gain in Japanese exports in more than two decades. The euro strengthened after Luxembourg’s Jean-Claude Juncker, who heads the group of euro-region finance ministers, said the European Union will not “abandon” Greece. “The recovery of most economies worldwide is still on track,” said Akane Vallery Uchida, a currency strategist at Royal Bank of Scotland Group Plc in Tokyo. “Equities in the Asia-Pacific region are also firm. Hence, risk sentiment may be supported and the yen may face downward pressure.” The yen declined to 122.39 per euro as of 1:24 p.m. in Tokyo from 122.21 in New York yesterday when it climbed to 121.06, the highest since March 5. The euro was at $1.3559 from $1.3558 yesterday, when it fell to $1.3464, the weakest since March 2. The dollar traded at 90.26 yen from 90.14 yen. Japan’s currency dropped the most versus Singapore’s dollar and South Korea’s won. The National Association of Realtors will say in Washington today that sales of previously owned U.S. homes fell 1.1 percent in February from January, when they fell 7.2 percent, according to a Bloomberg News survey of economists. Japan Exports Federal Reserve Bank of Chicago President Charles Evans said today in Shanghai that the U.S. economy may expand at a 3 percent to 3.5 percent pace this year. Japanese exports climbed 45.7 percent in February from a year earlier, the most since at least January 1986 when Bloomberg began to compile the data, a separate survey showed. Japan’s Ministry of Finance will release the report tomorrow. The yen weakened versus most Asian currencies as stocks in the region advanced. The MSCI Asia Pacific Index rose 0.4 percent, while the index excluding Japan gained 0.9 percent. “Equities in Asia don’t look that bad, so risk appetite could improve,” said Nobuaki Kubo, vice president of foreign exchange in Tokyo at BBH Investment Services Inc., a unit of New York-based Brown Brothers Harriman & Co. “This may contribute to some selling of the yen.” The Japanese currency fell 0.3 percent to 64.49 per Singapore dollar and declined 0.3 percent to 12.55692 won. Greece, Europe The euro strengthened after European Central Bank President Jean-Claude Trichet said yesterday the ECB is prepared to reassess its collateral rules if necessary, softening its stance as Greece struggles to cut the region’s largest budget shortfall. European Commission President Jose Barroso said the EU should spell out its aid measures at the March 25-26 summit in Brussels. Luxembourg’s Prime Minister Juncker said “there is no urgent need to have a decision” at this week’s meeting. The Swiss franc was near a record high against the euro on speculation its central bank is relaxing a policy of selling the currency. The franc climbed to a record against the euro yesterday even after the Swiss National Bank stressed it will “act decisively” to prevent an “excessive” appreciation of the currency if needed. SNB President Philipp Hildebrand is seeking to limit gains in the franc as concern about deficits in Greece, Portugal and Spain boost demand for the currency as a refuge. The franc’s strength is fueling concern deflation will take hold after prices declined for two consecutive months for the first time in a year. ‘More Room’ “From a fundamental point of view there is more room for an appreciation of the Swiss franc,” said Marcus Hettinger, foreign-currency analyst at Credit Suisse Group AG in Zurich. “Our analysis shows that its fair value is at 1.40 versus the euro. It may appreciate further. Only if it happens too fast, the SNB might intervene.” Hildebrand will speak today at the University of St. Gallen in Switzerland. To contact the reporters on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.

Source