By Bo Nielsen and Yoshiaki Nohara Aug. 27 (Bloomberg) -- The yen fell against most of its major counterparts as Prime Minister Naoto Kan said Japan is willing to take “bold” action to reduce the currency’s value after it reached a 15-year high versus the dollar this week. The dollar headed for a second weekly loss against the Swiss franc on speculation Federal Reserve Chairman Ben S. Bernanke may clarify the potential for injecting more monetary stimulus. The U.S. economy probably slowed in the second quarter even more than initially estimated, a report from the Commerce Department is forecast to show. “In the short term, the market doesn’t want to bet openly against the Bank of Japan because it has proved that it’s willing to intervene by its own,” said Stephan Maier, a foreign-exchange strategist at UniCredit SpA in Milan. The yen depreciated 0.3 percent to 107.72 per euro at 7 a.m. in New York, from 107.39 yesterday. Japan’s currency slid 0.3 percent to 84.65 per dollar, from 84.45, reducing its gain for the week to 1.1 percent. The dollar traded at 1.0237 francs, compared with 1.0240, and was poised for a 1 percent loss this week. The greenback was little changed at $1.2719 against the euro, compared with $1.2716. The U.S. economy grew at a 1.4 percent annual pace last quarter, the weakest in the recovery that began last year, according to a Bloomberg News survey of analysts before today’s Commerce Department report. Sales of new homes unexpectedly dropped in July to the lowest level on record, a Commerce Department report showed Aug. 25. Bernanke on Economy The Fed said on Aug. 10 that U.S. growth would be slower than anticipated and announced it would buy Treasuries to set a $2.05 trillion floor on its balance sheet and keep interest rates from rising. Bernanke, who speaks at 10 a.m. New York time at an annual Fed symposium in Jackson Hole, Wyoming, is likely to elaborate on how much the central bank has cut its forecast for 2011 growth, Paul McCulley, managing director at Pacific Investment Management Co., said yesterday in a radio interview on “Bloomberg Surveillance” with Tom Keene. “Recently extreme weak economic data have increased the odds of a second round of quantitative easing,” said Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York, in an investor note. “Further expansion of the Fed’s balance sheet and more direct efforts at reflating the U.S. economy will likely put downward pressure on the dollar.” Trichet’s Address European Central Bank President Jean-Claude Trichet, who will speak over lunch at 2:50 p.m. New York time in Jackson Hole, said on Aug. 5 that the euro-area economy was surpassing forecasts, which may pave the way for the ECB to look at phasing out its emergency lending measures. Japan’s currency weakened versus the euro and dollar as Kan said in Tokyo that the government will compile an outline of its stimulus plan by Aug. 31. The ruling Democratic Party of Japan presented its proposals yesterday and called on the Bank of Japan to “speedily take further steps” to boost growth. The central bank on Aug. 10 kept its key overnight lending rate at 0.1 percent and refrained from expanding credit measures. Kan said volatile foreign exchange movements are harmful to economic and financial stability. Economic ministers will meet today to discuss the policies, including strengthening ties with the BOJ, Chief Cabinet Secretary Yoshito Sengoku told reporters in Tokyo. The ministers agree on the need to curb the currency’s advance as soon as possible, he said. Situation ‘Severe’ Finance Minister Yoshihiko Noda said today the nation’s currency situation is “severe” and reiterated the government is prepared to take appropriate action when necessary. “So far nothing really new or relevant” came from Kan’s comments, said David Deddouche, a foreign-exchange strategist at Societe Generale SA in Paris. “What is clear is that the government has increased the pressure on the BOJ.” Japan’s currency has advanced 15 percent this year in the biggest gain among developed-world counterparts, according to Bloomberg Correlation-Weighted Currency Indices. The euro has dropped 9 percent, and the dollar is up 3.8 percent. Every one-yen advance against the dollar reduces Toyota Motor Corp.’s annual operating profit by 30 billion yen ($354 million), according to the company. “There’s a huge increase in the sense of urgency out of Tokyo today,” said Derek Halpenny, European head of foreign exchange at Bank of Tokyo-Mitsubishi UFJ Ltd., in an interview with Bloomberg Television. “There’s still a deep reluctance amongst the authorities in Tokyo to enter into the foreign- exchange markets. They will take other steps first.” To contact the reporters on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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