Yen Rises to 2-Week High Versus Euro on Japan’s Economic Growth

Aug. 17 (Bloomberg) -- The yen rose to a two-week high against the euro after a government report showed Japan’s economy grew last quarter as a global rebound helped the country climb out of its worst postwar recession.

Japan’s currency advanced against all 16 major counterparts after the report showed the world’s second-largest economy grew for the first time in more than a year on a rebound in exports and consumer spending. The euro also slid against the yen for a second day after Asian stocks extended a drop in global equities, damping demand for higher-yielding assets.

“Any growth is encouraging, even if it’s coming at a very slow pace,” said Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney. “Having a positive domestic economic reading is also positive for the yen by discouraging outflows.”

Japan’s currency rose to 133.90 per euro, the highest since July 30, as of 9:09 a.m. in Tokyo from 134.84 in New York on Aug. 14. The euro dropped to $1.4157 from $1.4203. The yen gained to 94.61 per dollar from 94.94.

The MSCI Asia Pacific Index of regional shares declined 0.9 percent, halting a two-day gain.

“We suspect some easing in risk appetite will help support safe-haven currencies like the yen,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington.

Japan’s gross domestic product expanded an annualized 3.7 percent in the second quarter, following a record drop of 14.2 percent in the three months ended March 31, the Cabinet Office reported in Tokyo today. That compared with a 3.9 percent rise forecast by analysts surveyed by Bloomberg News.