The yen fell against the dollar as the US said North Korea acknowledged it has nuclear weapons, prompting some investors to pull money from the region.
Declines in the yen accelerated after a survey showed Japanese consumer confidence fell to a five-year low in the first quarter, pushing the Nikkei 225 Stock Average to a 20-year low. A measure of consumer confidence in the US rose today.
"North Korea doesn't help, but the Japanese economy is in such bad shape with consumer confidence, stocks" and government yields at record lows, said Marc Chandler, chief currency strategist at HSBC Securities USA Inc, one of the 20-largest traders in the UF$1.2 trillion-a-day currency markets. "People are simply selling Japan, selling yen."
Japan's currency weakened to ¥120.14 to the dollar at 5pm in New York from ¥120.41 yesterday. The yen slid to ¥132.63 per euro from ¥132.19. Earlier, it reached ¥132.88, its weakest since May 1999, sending it toward its fifth losing week in six against the euro.
The dollar pared gains against the euro and yen after a government report showed the US economy expanded 1.6 percent in the first quarter, below the 2.4 percent estimated by economists.
The dollar was little changed at US$1.1038 per euro. Earlier it reached US$1.0969. The US currency is down 1.1 percent versus the euro this month, sending it toward its ninth monthly decline.
In other trading, the dollar traded at SF1.3616, from SF1.3595. The British pound was at US$1.5916, from US$1.5938.
Investors should favor the Canadian currency over the US dollar, and sell if the US dollar rises above C$1.4700 at the close of trading, Thomas Stopler, a global market economist for Goldman, Sachs & Co wrote in a report. The Canadian dollar traded at C$1.4456 per US dollar at 4:52pm in New York.
Citibank analysts are recommending investors buy US dollars versus the New Zealand dollar.
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