Yen Falls as Japanese Funds Buy Higher-Yielding Overseas Assets


The yen fell against 15 of the world's 16 most-actively traded currencies as Japanese investors sent more money overseas in search of higher returns.

Financial companies in Japan are trying to sell 200 billion yen ($1.8 billion) of mutual funds today and Jan. 9 focused on foreign markets, according to data compiled by Bloomberg. The currency dropped by the most versus since Dec. 21 as traders bet its advance last week, the biggest in two months, would prompt investors to switch to higher- yielding assets.

The yen dropped 0.8 percent to 109.46 per dollar at 10:04 a.m. in London, from 108.6 in New York on Jan. 4. It fell 0.3 percent to 160.60 per euro from 160.09 and declined to 108.96 against Canada's dollar from 108.29. The yen may trade between 108 and 110.67 yen to the dollar this week, Stretch predicted.

The dollar rose 0.9 percent against the Swiss franc to 1.1176 as the Sonntag newspaper reported Credit Suisse Group may announce another 2.5 billion francs ($2.3 billion) in writedowns in the fourth quarter.

Japan's currency fell the most versus the Australian dollar, dropping 1 percent to 95.63 yen. It slipped 0.9 percent to 11.639 Korean won, from 11.531 at the end of last week.


TradingEconomics.com, Bloomberg
1/7/2008 6:50:19 AM