The yen strengthened for a fourth week against the US dollar, the longest rally since November, as investors sought a haven on speculation that the economic recovery is slowing.
The Japanese currency gained versus 15 of its 16 major peers as US payrolls fell the first time this year and data showed manufacturing weakened in Europe, China and the US. The euro rose after the European Central Bank (ECB) said it would lend the region’s banks less money than economists forecast, fueling optimism the firms are stronger than expected. US service industries likely slipped last, a report to be released today may show.
“The solid performance of the yen was not surprising,” said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York. “A lot of the US numbers have been disappointing this week — we’re in for slow growth.”
The yen gained 1.7 percent to ¥87.75 per dollar, from ¥89.23 on June 25. It touched ¥86.97, its strongest level since December, on July 1. The Japanese currency rose 0.1 percent versus the euro to ¥110.27. Europe’s shared currency advanced 1.6 percent versus the US dollar to US$1.2566, touching a six-week high of US$1.2612 on Friday.
The euro tumbled to the lowest since 2001 versus Japan’s currency on June 29, ¥107.32, amid concern European banks’ demand for ECB loans when a 12-month facility expired this week would signal weakness in the region’s financial industry.
South Korea’s won and India’s rupee declined the most among Asian currencies this week on concern China’s economic slowdown and Europe’s debt crisis will deter investors from buying emerging-market assets.
The won fell 1.1 percent this week to close at 1,228.75 per US dollar in Seoul. The rupee declined by as much, completing the worst week in more than a month, to 46.79, after a central bank report on June 30 showed the nation’s current-account deficit widened to a record.
The New Taiwan dollar weakened 0.3 percent to NT$32.278 on signs the central bank intervened to help exporters.
Malaysia’s ringgit gained 0.3 percent on Friday and strengthened 0.8 percent this week to 3.2250 per US dollar.
Yuan forwards completed a fourth weekly gain. Twelve-month non-deliverable forwards jumped 0.2 percent to 6.6690 per US dollar and strengthened 0.14 percent in the week. The contracts reflect bets that the yuan will appreciate 1.5 percent in one year.
China’s central bank on Friday set the reference rate for yuan trading at 6.7720, 0.2 percent stronger than the previous day’s fixing.
Thailand’s baht, which was little changed this week, was at 32.41 per US dollar on Friday.
Elsewhere, Indonesia’s rupiah rose 0.1 percent this week to 9,063, for its third weekly gain. The Philippine peso traded at 46.49 against the US dollar and was down 0.1 percent from June 25.
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