Yen Falls as Signs Global Slump Is Abating Spurs Yield Demand

Aug. 19 (Bloomberg) -- The yen fell for a second day against the euro after economic reports in Europe added to evidence the global recession is easing, prompting investors to shift to higher-yielding assets.

Asian stocks may climb after German investor confidence advanced to the highest level in more than three years. The pound increased yesterday from near a one-month low versus the dollar after a U.K. Office for National Statistics report showed the inflation rate unexpectedly held at 1.8 percent in July, exceeding the median forecast of 1.5 percent.

“It’s certainly adding to signs that consumer sentiment is improving,” said Alex Sinton, a senior dealer at ANZ National Bank Ltd. in Auckland. “If a little bit of risk is brought back to the table in Asian time today, you will see the euro break $1.4142 and extend toward the 200-day moving average at $1.4192.”

The yen declined to 134.21 per euro as of 8:43 a.m. in Tokyo from 133.84 in New York yesterday. Japan’s currency weakened to 94.89 per dollar from 94.69. The dollar traded at $1.4145 per euro from $1.4136

Sterling was at $1.6569 from $1.6561 yesterday, when it rose 1.3 percent. The pound dropped to $1.6276 on Aug. 17, the lowest level since July 17. Yesterday’s advance helped sterling reduce its decline since Aug. 5 to 2.7 percent.

The Standard & Poor’s 500 Index rose 1 percent in New York yesterday, crude oil for September delivery increased 4 percent to $69.45 a barrel, and gold futures for December delivery gained 0.4 percent to $939.40 per ounce.

The benchmark MSCI Asia Pacific Index of regional shares ended little changed yesterday after falling as much as 1 percent.

Germany’s ZEW

The euro strengthened yesterday for the first time in three days versus the dollar and yen as the Mannheim-based ZEW Center for European Economic Research said its index of investor and analyst expectations for Germany increased this month to 56.1 from 39.5 in July. The median forecast of 35 economists in a Bloomberg News survey was for the index to rise to 45.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners including the euro and yen, fell 0.4 percent to 78.98.