Yen Climbs, Nearing Record High Versus Pound, on Risk Aversion

[Enivid]

The yen headed for its biggest weekly gain in three months against the pound and approached the strongest since 1995 versus the dollar as concern the global slowdown will worsen spurred investors to buy Japan’s currency.

Sterling fell toward a 23-year low versus the dollar and declined to near the weakest in two weeks against the euro before a U.K. report that may show Britain’s economy shrank last quarter by the most since 1990. The euro headed for a fourth weekly loss against the dollar before a European report that economists say will show manufacturing and service industries contracted for an eighth month in January.

“The U.K. and the eurozone seem to be the worst off among the major economies,” said Satoshi Tate, a senior vice president in the foreign-exchange division in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan’s second-largest publicly traded bank. “Risk aversion is still prominent among some investors, so the yen is likely to remain a haven currency.”

Japan’s currency rose to 122.10 per pound as of 2:34 p.m. in Tokyo, after advancing to a record 119.42 on Jan. 21. The yen is poised for a 9.5 percent gain versus the U.K. currency this week, the most since Oct. 24. The yen climbed to 88.56 per dollar after reaching 87.13 on Jan. 21, the strongest since July 1995. It advanced to 114.68 per euro after touching 112.12 on Jan. 21, the highest since March 2002.

The pound weakened to $1.3773 from $1.3877 in New York yesterday, after falling to $1.3622 on Jan. 21, the lowest since 1985. The euro rose to 93.97 U.K. pence from 93.70 pence yesterday. The euro declined to $1.2942, after sliding to $1.2825 on Jan. 21, a six-week low.

From Bloomberg News.