By Catarina Saraiva and Bo Nielsen Aug. 26 (Bloomberg) -- The yen and dollar fell against most major counterparts as global stocks advanced, damping demand for the currencies as havens. The currencies also dropped on speculation central bankers from around the world will signal at a meeting their intention to maintain stimulus measures to sustain the global recovery. Federal Reserve Chairman Ben S. Bernanke will speak at the session tomorrow. Stocks rallied. The yen extended losses versus the euro and dollar after U.S. applications for unemployment benefits fell last week more than forecast. “The tone has stabilized; people have been paring back their short positions,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York. “Going into Bernanke’s speech on Friday, most people think that the door will be opened to another round of quantitative easing.” Short positions are bets that currencies will fall. The yen weakened 0.2 percent to 107.31 per euro at 8:41 a.m. in New York, from 107.05 yesterday. It climbed to 105.44 on Aug. 24, the strongest level since July 2001. The greenback slipped to $1.2667 per euro, from $1.2659. The yen fell 0.2 percent to 84.71 per dollar. Initial claims for jobless benefits in the U.S. dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington. The number of people receiving jobless insurance decreased, while those getting extended benefits climbed. Stocks Gain The Stoxx Europe 600 Index rose 0.5 percent and futures on the Standard & Poor’s 500 Index gained as much as 0.4 percent. The S&P 500 yesterday dropped to the lowest level since July 7. Bernanke, European Central Bank President Jean-Claude Trichet and Bank of Japan Governor Masaaki Shirakawa are all scheduled to attend the Fed’s annual symposium at Jackson Hole, Wyoming, which starts today. Bernanke will discuss tomorrow the outlook for the economy. The symposium “has dampened some of the jittery selling of risk assets and currencies, amid hopes that policy makers will reaffirm commitment to policies that support the global economic recovery,” Brown Brothers Harriman & Co. currency strategists led by New York-based Marc Chandler wrote in a note to clients. The yen fell against most of its 16 major counterparts after Suzuki Motor Corp. Chairman Osamu Suzuki said today the strengthening currency poses an “extremely grave” situation and will have a “very big impact” on profit. Sony Profit Sony Corp., which generates more than 70 percent of revenue outside of Japan, said last month it loses about 2 billion yen ($23.6 million) of annual operating profit for each one yen gain against the U.S. currency. The Japanese government may ask the BOJ to ease monetary policy further as part of an economic stimulus package, the Asahi newspaper said today, without saying where it got the information. Japan’s prime minister, Naoto Kan, said today the yen’s surge this year against the dollar is one of the factors making the economic situation “severe.” “If we see sharp fall to about 80 in the dollar-yen it may be too painful” and lead to intervention, Geoffrey Yu, a currency strategist at UBS AG in London, said in an interview with Bloomberg Television. “But even large economies like Japan with significant fire power, they might have to go where the market takes them.” Efforts Won’t Work Japanese government efforts to curb the yen’s appreciation won’t work in the long term, Standard & Poor’s chief economist, David Wyss, said at a seminar in Seoul. The yen has risen 16 percent this year, the biggest gain among its developed-world counterparts, according to Bloomberg Correlation-Weighted Currency Indexes. The dollar has gained 3.9 percent and the euro has declined 9.1 percent. The Swedish krona rose after a report showed the non- seasonally adjusted jobless rate, based on a survey of about 29,500 people, dropped to 8 percent from 9.5 percent the previous month, Stockholm-based Statistics Sweden said in a statement today. The rate was 7.9 percent a year earlier. The krona appreciated 0.2 percent to 7.4327 per dollar. The Riksbank will increase its benchmark repo rate a quarter percentage point to 0.75 percent on Sept. 2, according to the median estimate of six analysts in a Bloomberg survey. To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net

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