The yen headed for its first weekly gain against the dollar in more than a month as tensions on the Korean peninsula and concerns that Europe’s debt crisis will spread boosted demand for Japan’s currency as a refuge. The euro headed for a fourth weekly loss against the dollar on prospects European Central Bank President Jean-Claude Trichet will signal today the bank won’t take further steps to stem the region’s sovereign-debt crisis. New Zealand’s dollar was set for the biggest weekly advance in a month before a U.S. report that may show payrolls expanded for a second month, supporting demand for higher-yielding currencies. “A possible conflict between the Koreas could adversely affect risk appetite,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. “This may spur yen-buying, as long as any attacks happen far away from Japan.” The yen traded at 83.77 per dollar as of 10:24 a.m. in Tokyo from 83.82 in New York yesterday. It’s set for a 0.4 percent advance this week, the first since the five days ending Oct. 29. Japan’s currency fetched 110.69 per euro from 110.73. Europe’s shared currency fetched $1.3213 from $1.3209 and was poised for a 0.2 percent loss this week. New Zealand’s kiwi dollar was little changed at 75.52 U.S. cents, set for a 0.7 percent advance this week. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners including the euro and yen, was little changed at 80.242, set for a 0.1 drop this week. North Korea has increased its number of multiple rocket launchers, bolstering its capability to attack South Korea’s capital, Yonhap News reported today, citing a South Korean government official it didn’t identify. Military Drills South Korea’s military said it is preparing to carry out the first live-fire artillery drills along its disputed western sea border since the deadly shelling of Yeonpyeong island by its communist neighbor. As more than 40,000 Japanese and U.S. troops begin joint exercises today, South Korea warned shipping companies to avoid 29 areas around its coast starting Dec. 6. North Korea attacked the fishing community and military outpost of Yeonpyeong on Nov. 23, killing four people in the first shelling of South Korea soil since the 1950-1953 civil war between the two sides. Trichet did not announce new measures to contain Europe’s sovereign-debt crisis at the ECB’s monthly policy meeting yesterday. The central bank kept its benchmark interest rate at a record low of 1 percent and extended an emergency loan program to combat “acute” market tensions. Trichet will speak at the ECB’s monthly news conference today. U.S. employment increased by 150,000 last month, after rising 151,000 in October, according to the median forecast of economists surveyed by Bloomberg News before the Labor Department’s report today. To contact the reporter on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Ron Harui in Tokyo at rharui@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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