Australia’s dollar rose for a second day against the yen after a government report showed import and export prices increased more than economists forecast, giving the Reserve Bank less room to cut interest rates. The so-called Aussie headed for a weekly gain versus the U.S. and Japanese currencies as optimism European leaders will contain the region’s debt crisis and gains in stocks boosted demand for higher-yielding assets. New Zealand’s dollar fell against all its major counterparts after a technical indicator used by traders to predict price changes signaled its recent gains were excessive. The market is “too far in terms of the expectations for RBA cuts,” said Todd Elmer, head of Group-of-10 currency strategy for Asia ex-Japan at Citigroup Inc. in Singapore. “We think that the next move is actually going to be a hike, not cut,” which would be positive for the currency, he said. The Australian dollar climbed to 85.16 yen as of 1:06 p.m. in Sydney from 84.89 yen yesterday in New York, having risen 1 percent this week. The currency traded at $1.0836 from $1.0841, set for a 1.7 percent gain since July 15. New Zealand’s dollar weakened 0.4 percent to 86 U.S. cents, and was at 67.59 yen from 67.58 yen. Australia’s import prices increased 0.8 percent in the second quarter from the previous three months, the Bureau of Statistics said. Economists surveyed by Bloomberg News forecast a 1.1 percent decline. To contact the reporters 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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