The yen fell versus most of its major counterparts on speculation Japan’s policy makers will maintain monetary stimulus while central banks elsewhere raise interest rates. The Swedish krona rose to the highest level in more than two years versus the dollar after the Riksbank increased borrowing costs last week. The yen weakened as Bank of Japan Governor Masaaki Shirakawa signaled the central bank may expand a lending program aimed at bolstering growth industries after the record temblor. “We had dovish comments from Shirakawa, and that’s reminding everyone the Bank of Japan is even more dovish than the Federal Reserve because they are actually looking to increase stimulus,” said Kathy Lien, director of currency research at the online currency trader GFT Forex in New York. The yen slid 0.1 percent to 119.41 against the euro at 10:41 a.m. in New York, from 119.24 on April 22. Japan’s currency declined 0.1 percent to 81.99 versus the greenback, from 81.88. The dollar traded at $1.4564 versus the euro, compared with $1.4561, after earlier declining 0.4 percent. The currency touched $1.4649 on April 21, the weakest level since December 2009. The Norwegian krone appreciated as crude oil touched a two- year high. The currency advanced 0.2 percent to 5.3605 versus the dollar after touching 5.3058 on April 21, the strongest level since August 2008. Canadian Dollar Canada’s currency traded at 95.50 cents versus the U.S. dollar after touching 94.55 cents on April 21, the strongest level since November 2007. Crude oil for June delivery fell 1 percent to $111.17 a barrel in New York after rising 1.1 percent to $113.48 a barrel, the highest level on an intraday basis in 31 months. Crude oil is Canada’s biggest export, while Norway is the seventh-largest exporter of the commodity. The Swedish krona climbed as much as 0.8 percent to 6.0591 versus the dollar, the strongest level since August 2008, after the Riksbank increased its target lending rate last week by a quarter-percentage point to 1.75 percent. The krona later advanced 0.2 percent to 6.0940. The ECB raised its main refinancing rate earlier this month to 1.25 percent from a record low 1 percent to contain inflation and left the door open for more rate increases even as nations such as Greece and Ireland struggle to contain debt turmoil. Rally in Krona The krona has rallied 4.9 percent this year in the best performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Currency Indexes. The euro has advanced 3.5 percent. “Currencies of nations which are hiking rates are attractive,” said Hideki Amikura, deputy general manager of foreign exchange in Tokyo at Nomura Trust & Banking Co., a unit of Japan’s largest brokerage. “There’s a high possibility for further euro appreciation.” Industrial orders in the euro area rose 1.5 percent in February after gaining a revised 1.2 percent in the previous month, according to median forecast before an April 27 report from the European Union’s statistics office. The Federal Reserve may announce at the conclusion of its policy meeting this week that it plans to complete the purchase of $600 billion of Treasuries by June. The central bank will leave its target rate for overnight lending between banks at zero to 0.25 percent on April 27, according to all of the 80 economists in a Bloomberg News survey. Policy makers have held the benchmark rate at that level since December 2008. U.S. GDP U.S. gross domestic product probably rose at a 1.9 percent annual pace in the first quarter compared with a 3.1 percent expansion in the previous three months, a Commerce Department report is forecast to show later this week. The dollar fluctuated against the yen after the Commerce Department reported that new home sales climbed 11.1 percent last month after a revised 13.5 percent drop in February. The median forecast in a Bloomberg News survey of 68 economists was for a 12 percent gain. The Bank of Japan will hold its benchmark interest rate at zero to 0.1 percent at its April 28 meeting, according to all 13 economists in a Bloomberg News survey. The central bank may cut its forecast for real growth in fiscal 2011 to 0.8 percent from 1.6 percent as a result of a record earthquake on March 11, the Nikkei newspaper reported. The yen and the dollar are the two worst performing currencies this year, according to Bloomberg Correlation- Weighted Indexes. The dollar has declined 6.1 percent, while the yen has lost 7.2 percent. Futures traders cut their bets that the euro will rise versus the dollar, according to data from the Commodity Futures Trading Commission. The difference in the number of wagers by hedge funds and other large speculators on a gain in the euro compared with those on a drop -- so-called net longs -- was 62,195 on April 19, compared with 64,985 a week earlier. To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net

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