Yen, Dollar Rise as Stock Declines Increase Demand for Safety

By Ron Harui

April 14 (Bloomberg) -- The yen and the dollar advanced against the euro on speculation declines in Asian shares and U.S. stock futures spurred investors to seek the relative safety of the two currencies.

The euro also ended two days of gains versus the dollar on concern a German report tomorrow will show wholesale prices in Europe’s largest economy dropped for an eighth month, backing the case for the region’s central bank to cut interest rates. Singapore’s dollar climbed versus all 16 most-active currencies after the city-state’s central bank “re-centered” the exchange-rate band in which the local dollar is managed.

“The selling in the stock market is causing buying of the yen,” said Toshihiko Sakai, head of trading for foreign exchange and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s biggest bank. “The dollar also may be bought as a ‘safe-haven’ currency.”

The yen rose to 133.15 per euro as of 10:35 a.m. in Tokyo from 133.81 in New York yesterday. The greenback climbed to $1.3322 per euro from $1.3368 yesterday when it touched $1.3392, the weakest since April 7. Japan’s currency was little changed at 100.01 versus the dollar from 100.10.

The Nikkei 225 Stock Average fell 1.7 percent and futures on the Standard & Poor’s 500 Index declined 0.6 percent.

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