Yen Advances as Japan’s Machine Orders Rise More Than Forecast

Nov. 11 (Bloomberg) -- The yen climbed against the dollar and euro after Japanese machine orders rose more than forecast, adding to evidence the economic recovery is gathering momentum.

The dollar reached a 15-month versus major counterparts before Chinese economic reports today that may support demand for higher-yielding assets. The New Zealand dollar fell after central bank Governor Alan Bollard said the “significant” increase in the currency is unlikely to be sustainable and may slow an improvement in the nation’s current-account deficit.

“The yen is benefiting as the market reacted to the positive machine orders data,” said Koji Fukaya, a senior currency strategist in Tokyo at Deutsche Bank AG. “The data were a surprise. Improving risk appetite may weigh down on the dollar.”

The yen rose to 89.57 per dollar as of 10:15 a.m. in Tokyo from 89.81 in New York yesterday. The yen earlier touched 89.47, the highest since Nov. 2. It gained to 134.32 per euro from 134.65. The dollar was at $1.4996 per euro from $1.4993.

The New Zealand dollar was at 74.30 U.S. cents from 74.35 cents. It earlier fell to as low as 74.07 cents. The so-called kiwi dropped 0.4 percent to 66.54 yen.

The dollar fell to C$1.0488, the lowest level since Oct. 23, before trading at C$1.0490 from C$1.0495 yesterday.

Machine orders, an indicator of business investment in three to six months, climbed 10.5 percent in September after gaining 0.5 percent in August, Japan’s Cabinet Office said today in Tokyo. The median estimate of 25 economists surveyed by Bloomberg was for a 4.1 percent gain.

Dollar Index

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, dropped to 74.917 from 75.021 in New York yesterday. The gauge was at the lowest level since August 2008.

China’s factory output probably rose 15.5 percent in October from a year earlier after gaining 13.9 percent in September, according to the median of economists’ estimates collected by Bloomberg. The statistics bureau is set to release the data at 10 a.m. today in Beijing.

“Stronger than expected Chinese data will likely underpin global recovery hopes and risk appetite,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “This could provide a leg down for the U.S. dollar.”

China’s customs bureau will report today that exports fell 13 percent last month from a year earlier, according to another Bloomberg survey. That would be the slowest decline since December 2008.