Yen Falls for 2nd Day on Speculation Government Will Intervene

Sept. 30 (Bloomberg) -- The yen fell against the euro and dollar on bets Japan will intervene to stem the currency’s gains amid the nation’s fragile economic recovery.

The yen retreated against all 16 major counterparts after Japan’s Finance Minister Hirohisa Fujii yesterday denied speculation he would accept a strong currency. The dollar retreated from near a two-week high against the euro as Asian stocks rose, damping demand for safe-haven currencies.

“As Fujii clarifies his stance on the yen, the bias is for the yen to weaken,” said Toshiya Yamauchi, a Tokyo-based manager of the foreign-exchange margin trading department at Ueda Harlow Ltd. “If the yen were to appreciate further, companies would mount pressure on the government to intervene.”

Japan’s currency dropped to 131.71 per euro as of 9:46 a.m. in Tokyo from 131.40 in New York yesterday. The yen has gained 2.7 percent against the euro this quarter. The yen weakened to 90.26 per dollar from 90.09. It advanced to as high as 88.24 on Sept. 28, the strongest level since Jan. 23. For the quarter, the yen has risen 6.8 percent against the dollar.

The dollar fell to $1.4692 per euro from $1.4587. Yesterday, it touched $1.4527, the strongest level since Sept. 14. The dollar has weakened 3.8 percent against the euro this quarter.

The MSCI Asia Pacific Index of regional shares gained 0.4 percent. Japan’s Nikkei 225 Stock Average rose 0.3 percent.