The yen fell against most of its major counterparts and the dollar strengthened after President Barack Obama said al-Qaeda leader Osama bin Laden had been killed by the U.S. military in Pakistan. Japan’s currency snapped two-day gains versus the euro and the dollar as Asian stocks rose after Obama delivered the news to America. The New Zealand dollar dropped as Obama’s announcement pushed up Treasury yields, narrowing the rate advantage offered in the South Pacific nation. South Korea’s won strengthened after the nation reported record exports and a trade surplus. Bin Laden’s death “may lessen worries over terrorism,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., referring to the al-Qaeda group. “This could boost risk-taking sentiment and may lead to selling of the yen and buying of the dollar.” The yen declined to 120.62 per euro as of 7:03 a.m. in London from 120.22 in New York last week. Japan’s currency slipped 0.4 percent to 81.55 per dollar, after rising to 81, the strongest since March 25. The dollar gained 0.1 percent to $1.4793 per euro. The MSCI Asia Pacific Index of shares added 0.7 percent, the Nikkei 225 Stock Average gained 1.6 percent and futures on the Standard & Poor’s 500 Index increased 0.5 percent. Bin Laden was killed in Pakistan by a team of U.S. operatives after a firefight at a house where he had been hiding, President Obama said. “Tonight we are once again reminded that America can do whatever we set our mind to,” Obama said in a TV address. “That is the story of our history.” Yield Advantage Bin Laden, who used a family inheritance to build a global terrorist network that killed almost 3,000 people in the Sept. 11, 2001, attacks on New York and Washington, was targeted in a compound in Islamabad. U.S. government debt has more than doubled since those attacks to $14.3 trillion, partly due to spending on military actions in Afghanistan and Iraq. New Zealand’s dollar weakened after the yield advantage of two-year New Zealand government bonds over similar-maturity Treasuries narrowed to 212 basis points today from 215 basis points on April 29. Australia’s dollar declined as the nation’s central bank is forecast to keep its benchmark interest rate at 4.75 percent tomorrow, according to 21 of 22 economists surveyed by Bloomberg News. “This is good news for the U.S., and that means the dollar gets bought,” said Kuniyuki Hirai , manager of foreign-exchange trading at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s largest lender. “This may reduce the burden of U.S. military expenses and prove that Obama’s operation was right.” Korean Trade New Zealand’s dollar dropped to 80.57 U.S. cents from 80.99 cents, after earlier reaching 81.09 cents, the highest since March 2008. Australia’s dollar fell to $1.0938 from $1.0971, after touching $1.1011, the strongest since the Aussie began trading freely in 1983. The won strengthened against all of its 16 major peers after a government report yesterday showed exports climbed 26.6 percent in April from a year earlier to a record $49.77 billion. Exports, equivalent to about half the gross domestic product, helped the economy expand last year by the most since 2002. South Korea’s government announced policy measures yesterday to aid troubled builders and the property market, including tax incentives for real estate investment trusts that buy unsold housing. “The won is rising after exports gained and the nation posted a trade surplus, which suggest more incoming dollars,” Sam Hong, senior vice president at Shinhan Bank in charge of currency strategy, said in Seoul. The won rose 0.6 percent to 1,065.23 per dollar after reaching 1,064.60, the strongest since August 2008. To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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