BLBG:Yen, Dollar Advance Versus Peers as Stocks Fall Amid Global Slowdown Signs
The yen rose against most of its major counterparts as Asian stocks declined amid signs of a slowdown in the region’s economies, boosting demand for the relative safety of Japan’s currency.
The euro held a three-day gain versus the dollar before a European Central Bank meeting and a summit in Brussels to discuss the sovereign debt crisis. Australia’s dollar weakened against 13 of its 16 most-active peers after a government report showed employers cut jobs for the first time in three months. South Korea’s won fell after the central bank left interest rates unchanged as Europe’s debt woes hurt exports.
“The market is inclining toward risk aversion, as you see stocks are trading lower,” said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities Ltd. “The dollar and yen are likely to be bought in this kind of environment.”
The yen rose 0.2 percent to 79.78 per Australian dollar at 7:55 a.m. in London. Japan’s currency gained 0.1 percent to 104.12 per euro, and was little changed at 77.61 per dollar. The euro was also little changed at $1.3416.
The MSCI (MXAP) Asia Pacific Index of shares fell 0.6 percent.
French President Nicolas Sarkozy and German Chancellor Angela Merkel have proposed amending European treaties to tighten rules on deficit spending and water down provisions demanding investor losses. In a letter to European Union President Herman Van Rompuy, the French and German leaders said they want a decision at the summit starting today so the steps can be ready by March 2012.
‘Pretty Hopeful’
“The market is pretty hopeful that we’ll see some resolution at the summit, and certainly France and Germany have signaled that they’re not leaving the table until something is decided,” said David Greene, a senior corporate currency dealer in Sydney at Western Union Business Solutions, a global payment services network. “If everything out of Europe is positive, I wouldn’t be surprised to see the euro up above $1.35.”
ECB policy makers will cut the benchmark interest rate by a quarter percentage point to 1 percent today, according to 53 of 58 economists in a Bloomberg News survey. They may also loosen collateral criteria to give banks greater access to cash and offer longer-term loans, said three euro-area officials with knowledge of the deliberations.
Aussie Weakens
The Australian dollar fell versus the yen after the statistics bureau said the number of people employed fell by 6,300 last month after a revised increase of 16,800 the previous month. The median estimate in a Bloomberg News survey of economists was for a 10,000 gain.
“Full-time jobs dropped a lot” said Lee Wai Tuck, a strategist at Forecast Pte in Singapore. “This will trigger some concerns over jobs market in Australia and, of course, the economy. The Aussie dropped.”
The won declined the most in two weeks after the Bank of Korea kept the benchmark seven-day repurchase rate at 3.25 percent, saying in a statement that “in terms of the upside and downside risks to the future growth path, the downside dominates.”
The won weakened 0.5 percent to 1,131.43 per dollar, the biggest decline since Nov. 24.
Japan’s machinery orders, an indicator of capital spending, slipped 6.9 percent from a month earlier, the Cabinet Office said today. The median forecast of 27 economists surveyed by Bloomberg was a 0.5 percent gain.
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Keith Jenkins in London at kjenkins3@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
