The New Zealand and Australian dollars advanced against the yen amid speculation the Federal Reserve will consider additional steps to bolster the U.S. economy, supporting demand for riskier assets. The so-called kiwi halted a two-day slide against the dollar before Fed Chairman Ben S. Bernanke speaks at Jackson Hole, Wyoming, where he last year signaled a second round of so- called quantitative easing. The Australian dollar rose for a second day against the yen after Japanese Finance Minister Yoshihiko Noda said he’s ready to take “bold actions” in foreign-exchange markets. The Aussie erased gains against the greenback as Asian shares resumed declines. “The second round of quantitative easing was part of the reason behind a jump in commodity prices, so a third round would cause a similar situation,” said Kengo Suzuki, manager of the foreign bond department in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value. “With increasing risk appetite, funds would flow to commodities, equities and higher-yielding currencies,” such as the Australian and New Zealand dollars, he said. New Zealand’s currency climbed to 62.75 yen as of 2:14 p.m. in Sydney from 62.68 in New York on Aug. 19. It was at 81.77 U.S. cents from 81.82 cents, after earlier gaining to 82.36 cents. Australia’s dollar added 0.2 percent to 79.83 yen and was little changed at $1.0405 after earlier gaining 0.3 percent. Ten-year Treasury yields tumbled to a record 1.9735 percent in New York last week, as concern the U.S. economy may stall spurred speculation the Fed may ease further. Shares Decline Barclays Plc said 10-year yields indicate traders have priced in $500 billion to $600 billion of Treasury purchases by the Fed. Citigroup Inc. said current rates can only be justified by more central bank bond buying or assuming the economy will shrink by 2 percent. The Fed completed $600 billion of bond purchases in June. While financial markets appear to demand additional steps by the Fed, a new bout of easing by the Fed isn’t the most likely scenario, Mizuho’s Suzuki said. The MSCI Asia Pacific Index of regional shares lost 0.9 percent. Standard & Poor’s 500 Index futures for September delivery showed the benchmark may drop 0.1 percent today after a 5.9 percent slump for the preceding two days. “Global risk sentiment will be weak overall,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. Over the next few weeks, the Aussie will fall below $1 and the kiwi will drop to at least 78 U.S. cents, Speizer forecast. To contact the reporter on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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