The yen and dollar strengthened after a Chinese report showed exports slowed last month and the customs bureau warned of “severe” challenges, adding to signs global growth is slowing. The euro fell from a five-week high against the yen after the European Central Bank said forcing investors to take losses in the region’s bailouts risks financial stability, and an official said some banks in the region may be required to maintain a 9 percent capital buffer. The Australian dollar reached a three-week high versus the U.S. currency after a report showed the jobless rate fell last month for the first time since March. “The yen has done well since the Chinese data,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “It’s difficult for Japan to put some kind of domestic currency measure in place” to halt gains in its currency, he said. The euro weakened 0.7 percent to 105.77 yen at 10:21 a.m. London time, after rising to 107.05 yen yesterday, the strongest since Sept. 9. The shared currency fell 0.2 percent to $1.3761. The yen appreciated 0.5 percent to 76.87 per dollar. The ECB said the involvement of the private sector in euro- area bailouts through enforced investor losses would have “direct negative effects” on banks. European Commission President Jose Barroso said today that Europe needs a “stronger” response to the sovereign-debt crisis. German Growth Germany’s top economic institutes cut their 2012 forecast for growth by more than half as the spiraling debt crisis weighs on banks and spending. Growth will slow to 0.8 percent next year from 2.9 percent in 2011, according to a bi-annual independent report commissioned by the German government. In April, the group forecast 2 percent economic growth for 2012. Some European banks may be asked to keep a 9 percent capital buffer to address sovereign risks, an EU official told reporters today in Brussels on the condition of anonymity. That is one of the figures the European Banking Authority is working on as part of an assessment of which lenders need a temporary buffer of extra capital, the person said. The Stoxx Europe 600 Index of shares fell 0.5 percent, and futures on the Standard & Poor’s 500 Index expiring in December dropped 0.2 percent. The yen strengthened against all but one of its 16 major counterparts after China’s customs bureau said exports rose a less-than-forecast 17.1 percent in September from a year earlier. The trade surplus was $14.51 billion, the smallest since May. Growth in shipments to Europe, China’s biggest export market, slumped to 9.8 percent, from 22 percent. Australian Dollar Australia’s dollar rose for a second day after the statistics bureau said the number of people employed in the nation rose by 20,400, from a revised 10,500 drop in August. The jobless rate fell to 5.2 percent from 5.3 percent. “Details in the jobs number were strong, so understandably the Aussie is up,” said Sue Trinh, a senior strategist at Royal Bank of Canada in Hong Kong. “A stronger number in one of New Zealand’s biggest trading partners is clearly beneficial for the kiwi as well.” The Australian currency gained 0.1 percent to $1.0172 after rising to $1.0233, the strongest since Sept. 21. New Zealand’s dollar fell 0.3 percent to 79.33 U.S. cents after dropping as much as 0.6 percent. To contact the reporter on this story: Keith Jenkins in London at kjenkins3@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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