Aug. 30 (Bloomberg) -- The yen rose against all 16 of its most-traded counterparts on speculation the Bank of Japan’s decision to increase credit-easing measures won’t be enough to weaken the nation’s currency from a near-15 year high. Japan’s currency headed for a fourth straight monthly advance versus the dollar even as Prime Minister Naoto Kan said the nation is preparing a 920 billion yen ($10.8 billion) stimulus plan and the central bank added 10 trillion yen in liquidity injections. The dollar rose versus most major counterparts after data showed U.S. consumer spending rose. “The yen’s reaction is highlighting that the fear in the market was that there would be something stronger announced,” said Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto. “If the Bank of Japan’s policy is increasing its liquidity provisions, it’s not enough to substantially weaken the yen.” The Japanese currency strengthened 0.6 percent to 84.71 per dollar at 10:17 a.m. in New York, from 85.22 on Aug. 27. It was poised for a monthly gain of 2.1 percent, which would be the longest winning streak since the five months ended Jan. 30. The yen advanced 1.2 percent to 107.40 per euro, from 108.72. The dollar gained 0.7 percent to $1.2675 per euro, from $1.2763. The Swiss franc appreciated 0.8 percent to 1.3011 per euro, trading near a record high of 1.2972 per euro that it reached on Aug. 25. Stocks Fluctuate Stocks fluctuated, with the Standard & Poor’s 500 Index declining as much as 0.4 percent after adding 1.7 percent on Aug. 27, the biggest gain in more than a week. Consumer purchases in the U.S. increased 0.4 percent in July, the most since March, after being little change the prior month, Commerce Department figures showed today in Washington. Incomes increased 0.2 percent, less than projected. Federal Reserve Chairman Ben S. Bernanke said last week the U.S. central bank “will do all that it can” to ensure a continuation of the economic recovery and that more securities purchases may be warranted if growth slows. The Federal Open Market Committee “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly,” the Fed chairman said Aug. 27 at the Kansas City Fed’s annual monetary symposium held in Jackson Hole, Wyoming. The economy grew at a 1.6 percent annual rate in the second quarter, less than previously estimated, according to revised figures from the Commerce Department released Aug. 27. A report from the department on Sept. 3 may show the economy shed jobs in August for a third straight month. May Be a Correction “Equities are in negative territory; this may be something of a correction from last Friday’s exuberance, an overreaction to Bernanke’s comments,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp., the world’s largest custodial bank, with more than $20 trillion in assets under administration. “The safe-haven currencies seem to be getting a better bid.” The Brazilian real and New Zealand dollar gained against the euro, each strengthening 0.2 percent. Canada’s dollar rose versus the euro and touched the highest level in a week against the greenback amid speculation the Bank of Canada will forge ahead with an increase in interest rates when policy makers meet Sept. 8. The Canadian currency gained 0.3 percent to C$1.3366 per euro and touched C$1.0473 per U.S. dollar, the strongest level since Aug. 23, before reversing gains to trade at C$1.0538. BOJ Facility At an emergency meeting today, the Bank of Japan said it will boost the amount of funds in a lending facility to a total of 30 trillion yen while keeping its benchmark overnight lending rate at 0.1 percent. Pressure on the bank has been mounting since it held the target lending rate at 0.1 percent and refrained from expanding credit measures at an Aug. 9-10 meeting. The yen reached 83.60 per dollar on Aug. 24, the strongest since June 1995. Bank Governor Masaaki Shirakawa said a deceleration in domestic consumer prices and slow growth and weak unemployment numbers in the U.S. are creating uncertainties in the market. “These uncertainties are being reflected in volatile currency and equity markets,” Shirakawa said in a briefing after the central bank’s emergency meeting. “In this kind of situation, the BOJ sees the need to cautiously observe these downside risks to our economy.” The yen tends to gain in times of economic or financial turmoil as Japan’s current-account surplus means it doesn’t need foreign capital. A stronger domestic currency hurts the overseas competitiveness of Japanese exporters and reduces the value of earnings from other countries. --Editors: Greg Storey, Paul Cox To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net To contact the editor responsible for this story: Keith Campbell at k.campbell@bloomberg.net

Source