Yen Trades Near One-Week Low Versus Euro as Asian Stocks Gain

July 15 (Bloomberg) -- The yen traded near a one-week low against the euro as Asian stocks rose on speculation a U.S. report today will show industrial production shrank at a slower pace, adding to signs the worst of the global recession is over.

Japan’s currency fell against 15 out of 16 most-active currencies after earnings at Goldman Sachs Group Inc. and Intel Corp. beat analysts’ forecasts, damping demand for safer assets. The Australian and New Zealand dollars gained for a third day against the yen as rising Asian stocks support demand for the higher-yielding assets of the two South Pacific nations.

“Rising equities will certainly lead to risk taking,” said Shinichi Hayashi, a foreign-exchange dealer at Shinkin Central Bank in Tokyo. “U.S. data may spur hopes for an economic recovery. The bias is for selling the yen.”

The yen traded at 130.76 per euro as of 9:35 a.m. in Tokyo from 130.62 yesterday in New York. It earlier dropped to 130.96, the weakest since July 8. The dollar bought $1.3982 per euro from $1.3967. The yen was at 93.59 versus the dollar from 93.50.

Australia’s currency rose to 74.29 yen from 74.14 yesterday. New Zealand’s dollar was at 59.96 yen from 59.73.

Interest rates of 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., typically attract investors to the South Pacific nations’ assets. The Bank of Japan will keep its target interest rate at 0.1 percent at a policy meeting today, according to a Bloomberg News survey.

Industrial Output

Factory production probably fell 0.6 percent last month after a 1.1 percent drop in May, according to a Bloomberg News survey before the Federal Reserve releases the data.

Shares gained after Goldman Sachs said second-quarter profit rose amid record trading and stock underwriting. Net income in the three months ended June 26 was $3.44 billion, or $4.93 a share, the bank said. That surpassed the $3.65 per-share average estimate of analysts surveyed by Bloomberg.

The Nikkei 225 Stock Average rose 0.5 percent and the MSCI Asia Pacific Index of regional shares advanced 0.4 percent.

“There is a sense that optimism-driven trading is re- emerging,” said Daisuke Uno, chief strategist in Tokyo at Sumitomo Mitsui Banking Corp., a unit of Japan’s third-largest banking group. “The forecast-beating results from Goldman Sachs and Intel suggest the yen will weaken and stocks will advance.”

JPMorgan Chase & Co. and International Business Machines Corp. are among other companies in the Standard & Poor’s 500 Index due to report results this week.