The yen climbed to near a seven-week high against the euro and Japanese stocks fell amid signals the global economic recovery may be slowing. Australia’s dollar dropped after the election failed to form a majority government. Japan’s currency rose against all 16 of its most-traded counterparts and the Australian dollar slid 0.3 percent to 89.17 U.S. cents as of 3 p.m. in Tokyo. The Nikkei 225 Stock Average retreated 0.8 percent to 9,108.58, the lowest since November. The MSCI Asia Pacific Index was little changed. Futures for the Standard & Poor’s 500 Index climbed 0.2 percent and those for the Euro Stoxx 50 increased 0.1 percent. European Central Bank council member Axel Weber said on Aug. 20 that the ECB should help banks through end-of-year liquidity tensions before deciding when to withdraw emergency lending measures. That triggered concern about Europe’s recovery ahead of a U.S. report tomorrow that will show purchases of new and existing homes dropped 12 percent in July, according to the median estimate of 54 economists in a Bloomberg News survey. “The ECB official’s comments are making the market focus on Europe’s economic problems again,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees $104 billion. “Uncertainty about the economic recovery is making the market wary of taking risks.” The yen gained to 108.49 per euro in Tokyo from 108.83 in New York on Aug. 20, when it reached 108.26, the strongest since July 1. Japan’s currency was at 85.37 per dollar from 85.62. It reached 84.73 versus the dollar on Aug. 11, the most since July 1995. The dollar was at $1.2710 per euro from $1.2712. Ringgit, Aussie Malaysia’s ringgit advanced 0.3 percent to 3.1273 per dollar on speculation the central bank will further ease foreign-exchange rules to bolster regional trade as economic growth accelerates. The ringgit has appreciated 9.3 percent this year, leading gains among Asia’s most-traded currencies as the central bank last week allowed it to be used for trade settlement. South Korea’s won gained 0.1 percent to 1,181.58. The Australian dollar dropped against all its major peers after neither Prime Minister Julia Gillard nor opposition leader Tony Abbott obtained an outright majority in the Aug. 21 vote, meaning one side must win negotiations with independent lawmakers to form a government. The so-called Aussie “will bear the brunt of the uncertainty,” said Su-Lin Ong, senior economist at RBC Capital Markets Ltd. in Sydney. Australian mining companies including BHP Billiton Ltd. and Rio Tinto Group rose on optimism the election will result in a proposed mining tax either being scrapped or diluted. BHP advanced 0.7 percent, rising for the first time in four days, while Rio climbed 1.1 percent. Japan Exporters Canon Inc., the world’s biggest maker of cameras, fell 1.7 percent in Tokyo. Sharp Corp., which counts Europe as its largest market outside Japan, declined 2.2 percent. Japan’s shipments abroad advanced 21.8 percent in July from a year earlier after increasing 27.7 percent in June, according to another Bloomberg survey before the Finance Ministry reports data on Aug. 25. A report tomorrow by the National Association of Realtors will show U.S. July sales of existing homes plummeted 12.9 percent from June, the biggest monthly loss of 2010, according to the median estimate of economists surveyed by Bloomberg. Home construction and property sales led the way out of the previous seven recessions going back to 1960, according to PMI Group Inc., a mortgage insurer in Walnut Creek, California. China Gainers In Shanghai, Sany Heavy Industry Co. added 3.8 percent after first-half net income gained 162 percent from a year earlier. Changsha Zoomlion Heavy Industry Science & Technology Development Co. added 1.9 percent as first-half earnings increased 94 percent from a year earlier. Crude oil rose from the lowest in six weeks, gaining 0.2 percent to $74 a barrel in New York as Chinese equities climbed, increasing optimism that growth in emerging markets will boost fuel demand. “Going into next year we’ll see higher crude prices coming through on the back of stronger demand growth from emerging markets and weakening of global supply,” said Neil Beveridge, an analyst at Sanford C. Bernstein & Co. in Hong Kong. To contact the reporters on this story: Will McSheehy in Singapore at wmcsheehy@bloomberg.net Monami Yui in Tokyo at myui1@bloomberg.net

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