Yen Falls Against Dollar, Euro on Speculation Gains Excessive

By Stanley White

Nov. 13 (Bloomberg) -- The yen declined from two-week highs against the dollar and the euro on speculation its recent gains were excessive.

The euro fell for a third day against the dollar before data that may show Germany, Europe's largest economy, entered a recession, bolstering expectations that policy makers will lower interest rates. The pound slid to a six-year low on speculation borrowing costs will fall after the Bank of England said the U.K. economy will shrink through most of next year.

``The yen rose so much yesterday that it seems some Japanese importers were caught by surprise,'' said Tokichi Ito, deputy general manager of foreign exchange in Tokyo at Trust & Custody Services Bank Ltd., a unit of Japan's second-largest publicly traded lender. ``It's an attractive level for them to sell.''

Japan's currency fell to 95.62 per dollar as of 9:54 a.m. in Tokyo from 95.01 late yesterday in New York, when it reached 94.48, the strongest since Oct. 28. It also slid to 119.08 against the euro from 118.77. Japan's currency earlier today reached 117.65, also the highest this month. The dollar rose to $1.2473 per euro from $1.2505.

The yen has strengthened against all of the world's 16 most-active currencies this month, extending gains in both September and October. The dollar was the only one of the currencies to climb versus the yen in August.

To contact the reporter on this story: Stanley White in Tokyo at swhite28@bloomberg.net