Yen Heads for 2nd Weekly Loss Versus Euro on Global Optimism

Oct. 16 (Bloomberg) -- The yen fell, heading for a second weekly decline against the euro, on speculation Asian stocks will extend a global rally and before a U.S. report forecast to show industrial production expanded for a third month.

The pound was set for its first weekly gain in a month versus the greenback on optimism the Bank of England will suspend asset purchases, easing concern it’s flooding the market with sterling. The dollar traded near a 14-month low against the euro amid speculation European Central Bank officials will today signal the bank may begin withdrawing unconventional policy measures, boosting demand for higher-yielding assets.

“U.S. data are reinforcing the path for an economic recovery,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “Risk-taking appetite is improving, so the bias is for the yen and the dollar to be sold.”

The yen touched 136.03 per euro, its lowest level since Aug. 24, and traded at 135.84 per euro as of 8:50 a.m. in Tokyo from 135.35 in New York yesterday. The currency slid to as low as 90.99 per dollar, the weakest since Sept. 25, and was at 90.82 from 90.55.

The dollar fetched $1.4955 per euro from $1.4947 in New York yesterday, when it declined to $1.4968, the lowest since Aug. 13, 2008. The U.S. currency fell to $1.6334 versus the pound from $1.6268. It earlier touched $1.6340, the weakest since Sept. 24.

The Standard & Poor’s 500 Index and the MSCI World Index of shares each climbed 0.4 percent yesterday.

The Federal Reserve will say today that U.S. industrial output rose 0.2 percent in September after gaining 0.8 percent in August, according to the median estimate of 77 economists in a Bloomberg News survey.

Federal Reserve minutes this week showed some policy makers were open last month to boosting the central bank’s $1.25 trillion mortgage-backed securities purchase program.