The yen and dollar strengthened against most major currencies as stock losses and signs the global recovery is faltering boosted demand for safer assets. Japan’s currency advanced versus 15 of its 16 counterparts before reports today that economists said will show slowing growth in U.S. and U.K. manufacturing. The Swiss franc rose to a record against the euro after China’s Purchasing Managers’ Index climbed at a slower pace and Fitch Ratings said Europe’s sovereign debt problem boosts the risk of a renewed recession. “Like most safe-haven assets, the dollar, the yen and the franc are rising at the moment due to risk aversion,” said Gareth Berry, a currency strategist in Singapore at UBS AG, the world’s second-largest foreign-exchange trader. “The weak PMI from China pushed” the franc higher, he said. The yen rose to 107.94 per euro as of 7:01 a.m. in London, from 108.22 in New York yesterday. The currency climbed to 107.32 on June 29, the highest since November 2001. The yen advanced to 88.33 per dollar from 88.43, after earlier gaining to 88.09, the highest since May 6. The dollar rose to $1.2217 per euro from $1.2238. The euro fell to 1.3136 francs from 1.3184, after slipping to 1.3074, the weakest since the single currency’s 1999 debut. The yen has strengthened 14 percent this year, the biggest gain among its 10 developed-world counterparts, according to Bloomberg Correlation-Weighted Indexes. The dollar has risen 7.9 percent, and the euro has lost 9.5 percent. Stocks Decline The MSCI Asia Pacific Index of stocks dropped 1.3 percent, a third day of losses, as economic reports signaled the global recovery is losing momentum. The Institute for Supply Management’s U.S. manufacturing gauge fell to 59 in June from 59.7 in May, according to a Bloomberg survey. A gauge based on a survey of U.K. companies by Markit Economics and the Chartered Institute of Purchasing and Supply fell to 57.5 in June from 58, another survey showed. “People are concerned that not many economies in the world are going to be sustainable after stimulus measures expire,” said Susumu Kato, chief economist in Tokyo at Credit Agricole CIB and CLSA, a unit of France’s largest bank by branches. “The bias is for the yen to be bought.” The yen typically strengthens in times of financial turmoil as Japan’s trade surplus means the nation does not have to rely on overseas lenders. The dollar benefits as the world’s main reserve currency. China’s Purchasing Managers’ Index fell to 52.1 in June from 53.9 in May, the Federation of Logistics and Purchasing said in an e-mailed statement. ‘Double-Dip’ “Financial market fears about the solvency of some European governments and the future of the euro zone cast a shadow over the outlook,” Brian Coulton, head of global economics at Fitch, wrote in an statement. “While not our central case, the elevation of euro area sovereign debt fears and renewed financial-market volatility have increased the risk of a double-dip recession.” Fitch forecasts world gross domestic product will expand 3.1 percent this year. The Australian and New Zealand dollars fell to three-week lows against the greenback after reports showed Australian building approvals fell and retail sales growth slowed. Home-building approvals dropped 6.6 percent in May, while retail sales rose 0.2 percent, a third of the pace in April, the Bureau of Statistics said. “You can see the Aussie back down to 80 cents and further losses in equity markets,” said Thomas Averill, a Sydney-based senior consultant at HiFX, a foreign-exchange risk management firm. “Into the weekend it would be a very brave person that’s long risk, so you’re either going to be short or standing on the sidelines.” A short position is a bet an asset will decline. Australia’s currency slid 0.5 percent to 83.66 U.S. cents, after declining to 83.16, the weakest since June 10. New Zealand’s dollar fell 0.4 percent to 68.23 cents, after reaching 67.98 cents, also the lowest since June 10.

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