By Emma Charlton Nov. 30 (Bloomberg) -- The yen and dollar weakened against higher-yielding currencies as China cut the amount of cash that banks must set aside as reserves to spur growth, damping demand for safer assets. The yen dropped the most versus the Brazilian real and Mexican peso as the People’s Bank of China said reserve ratios will decline by 50 basis points effective Dec. 5, the first reduction since 2008. The Swiss franc weakened after Standard & Poor’s lowered the credit ratings of major banks including UBS AG and Credit Suisse AG. The euro headed for a monthly loss against the dollar on concern European measures to counter the debt crisis will fail to halt contagion. “There’s a knee-jerk reaction in risk assets� with safer securities selling off, said Lee Hardman, a strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “This marks a shift toward easing of monetary policy in China, which is the main engine of global growth, and that’s improved the outlook for the global economy.� The yen was little changed at 103.77 per euro at 7:13 a.m. in New York after earlier rising as much as 0.4 percent. It weakened 0.9 percent against the real and dropped 0.8 percent versus the peso. The dollar was little changed at $1.3305, and fell 0.8 percent versus the real and 0.5 percent against the Canadian currency. Before the announcement, China’s bank reserve ratio was a record 21.5 percent for the biggest lenders, based on previous PBOC statements. A government clampdown on property speculation has added to the risk of a deeper slowdown in the economy that contributes the most to global growth. Stocks Gain The Stoxx Europe 600 Index rose 0.7 percent and futures on the S&P 500 Index expiring in December gained 0.7 percent. Japan’s currency has strengthened 4.3 percent against the euro this month as euro-region leaders struggled to stave off the crisis and protect Italy and Spain from surging bond yields, boosting demand for the safest assets. The euro earlier approached an eight-week low versus the greenback after euro-area finance ministers meeting yesterday conceded efforts to expand their bailout fund missed the target and said they would seek a greater role for the International Monetary Fund. “I’m not of the view that any of the decisions being taken by the finance ministers are changing anything,� said Jeremy Hale, head of macro strategy at Citigroup Inc. in London. “We’re still waiting for some definitive action. Markets are still very nervous about a breakup of the euro-region.� The franc weakened 0.1 percent to 1.2276 per euro, and fell 0.2 percent to 92.27 centimes per dollar. S&P lowered the ratings of Goldman Sachs Group Inc. and Bank of America Corp. to A- from A, as part of criteria changes started three years ago. The company also reduced the rankings of Morgan Stanley, Citigroup, Bank of America’s Merrill Lynch unit and JPMorgan Chase & Co. --Editors: Nicholas Reynolds, Matthew Brown To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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