Yen Rises Against Dollar, Euro


The yen rose after the Fed and the ECB said economic growth is slowing, prompting speculation they will lower interest rates.

The currency extended this year's gain to 4 percent versus the dollar before Fed Chairman Ben S. Bernanke's testimony in Congress on the economy and approached a four-month high against the euro after ECB council member Yves Mersch cited ``downside risks'' to expansion. The extra yield investors earn on two-year Treasuries over similar-maturity Japanese government debt narrowed to the least since April 2004 this week.

The yen advanced to 157.18 per euro at 7:45 a.m. in London, from 157.72 late in New York yesterday, when it reached 156.29, the strongest since Sept. 10. Japan's currency was at 107.35 per dollar compared with 107.64. The yen may advance to 156.30 versus the euro today, Inoue forecast.

The dollar traded at $1.4648 per euro from $1.4652. Bernanke will reiterate today the central bank will cut interest rates to ease credit-market losses and avoid recession.


TradingEconomics.com, Bloomberg
1/17/2008 6:56:52 AM