Yen Rises as Russia Devaluation Spurs Emerging-Assets Concern

By Ron Harui

Jan. 19 (Bloomberg) -- The yen rose after Russia devalued its currency for a fourth straight day, prompting investors to reduce holdings of emerging-market assets.

Japan’s currency snapped two days of losses versus the dollar and the euro after a Russian central bank official, who wouldn’t be identified on matters of bank policy, said the ruble’s trading band against the target basket of dollars and euros has been expanded.

“Russia’s ruble has been devalued almost every day, sparking risk aversion toward developing markets as it’s an emerging currency,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The yen is being bought.”

The yen rose to 90.45 against the dollar as of 7:42 a.m. in London from 90.72 late in New York on Jan. 16. It had touched 91.30, also the lowest since Jan. 9. The currency also traded at 120.31 per euro from 120.37 late in New York on Jan. 16. It had reached 122.17, the lowest level since Jan. 9.

The ruble declined 1.2 percent to 32.9209 against the dollar from 32.53 on Jan. 16, and fell 1.4 percent to 43.7774 from 43.1575 versus the euro. Russia’s currency was devalued on Jan. 11, 12, 14, 15 and 16 after official trading for 2009 started Jan. 11.

To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net.