Yen, Dollar Gain as Drop in U.S. Sales Spurs Demand for Safety

May 14 (Bloomberg) -- The yen rose for a fourth day against the euro and the dollar strengthened after an unexpected drop in U.S. retail sales spurred demand for the relative safety of the Japanese and U.S. currencies.

The euro fell to a two-week low versus the yen after Marko Kranjec, a European Central Bank council member, said the bank is likely to increase its asset-purchase program and may broaden the scope beyond covered bonds. The Australian and New Zealand dollars traded near the lowest in a week as Asian stocks extended a global slump, raising concern demand for higher- yielding assets will evaporate.

“Recent economic data are disappointing investors hoping for a rapid and robust global recovery,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Any faltering in risk appetite should help support ‘safe- haven’ currencies like the dollar and the yen.”

The yen advanced to 129.20 per euro at 9:01 a.m. in Tokyo from 129.61 in New York yesterday. It earlier reached 128.87, the strongest since April 29. The dollar gained to $1.3544 per euro from $1.3600 yesterday. The yen traded at 95.38 against the dollar from 95.30.

Australia’s currency traded at 75.32 U.S. cents after falling as low as 75.16 cents, approaching its lowest since May 8. The Nikkei 225 Stock Average fell 1.3 percent after the Standard & Poor’s 500 Index lost 2.7 percent yesterday.

U.S. retail sales decreased 0.4 percent in April after dropping a revised 1.3 percent in March, the Commerce Department reported yesterday in Washington. The median forecast of economists surveyed by Bloomberg was for no change.