The dollar gained versus all its major counterparts after Moody’s Investors Service cut ratings on European nations including Italy, Spain and Portugal, boosting demand for safer assets. The U.S. currency advanced to its highest in almost three weeks versus the yen after the Bank of Japan added to monetary easing to sustain the Asian nation’s economy. The euro declined for a third day against the greenback before European finance ministers meet tomorrow to discuss a second aid package for Greece, following the country’s approval of austerity measures. The Australian and New Zealand dollars dropped as Asian stocks declined, curbing risk appetite. “Certainly risk doesn’t get helped by this kind of announcement,� said Robert Ryan, a currency strategist at BNP Paribas SA in Singapore, referring to Moody’s statement. “When risk goes off, the dollar gets bid and it’s pretty much bid across the board.� The dollar rose 0.2 percent to $1.3165 per euro as of 1:35 p.m. in Tokyo from yesterday in New York. It advanced 0.4 percent to 77.92 yen after touching 77.96, the most since Jan. 25. Australia’s dollar slid 0.4 percent to $1.0691, while its New Zealand counterpart lost 0.3 percent to 83.10 U.S. cents. The euro rose 0.3 percent to 102.58 yen. Spain was downgraded to A3 from A1 with a negative outlook, Italy was cut to A3 from A2 with a negative outlook and Portugal was lowered to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced credit levels for Slovakia, Slovenia and Malta. The Bank of Japan said today it would increase its purchases of Japanese government bonds by 10 trillion yen ($128 billion). The central bank maintained the overnight lending rate at between zero and 0.1 percent. The MSCI Asia Pacific Index (MXAP) of shares declined 0.3 percent. To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Candice Zachariahs in Sydney at czachariahs2@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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