The yen rose against all 16 of its most-traded peers as demand for assets perceived to have higher risks faded amid concern the U.S. may require additional stimulus measures to stem an economic slowdown. Japan’s currency appreciated to an eight-month high against the dollar before a U.S. report that may show consumer spending grew at a slower pace in June, adding to signs the world’s largest economy is cooling. Pacific Investment Management Co. said the London interbank offered rate, which banks pay for dollar loans, is falling partly on speculation the Federal Reserve will resume buying bonds. “Recent data has been dreadful, which doesn’t bode well for fiscal retrenchment,” said Neil Mellor, a currency strategist at Bank of New York Mellon Corp. in London. “The outlook is fairly gloomy and the risks are skewed to the downside so the likes of the yen are going to be underpinned.” The yen appreciated 0.6 percent to 85.99 per dollar as of 9 a.m. in London, from 86.50 in New York yesterday. It gained as much as 0.8 percent to 85.85, the strongest level since Nov. 27. The currency advanced 0.3 percent to 113.70 per euro from 114 per euro. The dollar slid 0.3 percent to $1.3218 per euro. Growth in U.S. personal spending slowed to 0.1 percent in June from 0.2 percent in May, according to a Bloomberg survey before today’s report. Another report from the Commerce Department may show factory orders decreased 0.5 percent in June, after a 1.4 percent drop in May, according to a separate survey. Australian Economy Japan’s currency rallied after Australia’s Bureau of Statistics said retail sales rose 0.2 percent in June, less than the 0.4 percent gain forecast by economists surveyed by Bloomberg. Home-building approvals unexpectedly dropped 3.3 percent, the bureau said. Australia’s dollar dropped against all but one of its 16 major counterparts as the central bank also kept its benchmark interest rate unchanged for a third month at 4.5 percent. The euro traded at a three-month high against the U.S. currency on speculation a slowing economy will prompt the Fed to increase stimulus measures. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, fell below its 200-day moving average, reaching 80.589, the lowest level since April 16. “Markets seem to be assuming that there will be a significant increase to quantitative easing, which puts pressure on the U.S. dollar,” said Robert Ryan, a currency strategist at BNP Paribas SA in Singapore. The Fed’s next policy decision is scheduled for Aug. 10. To contact the reporters on this story: Paul Dobson in London at pdobson2@bloomberg.net; Candice Zachariahs in Sydney at czachariahs2@bloomberg.net.

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