Yen, Dollar Decline on Global Optimism, RBA’s Bullish Remarks

Nov. 25 (Bloomberg) -- The yen and dollar weakened against higher-yielding currencies, reversing earlier gains, as renewed optimism over the prospects for a global economic recovery spurred investors to buy riskier assets.

Japan’s currency fell against the Australian dollar after a report in Tokyo showed the nation’s exports dropped at the slowest pace in a year as government spending worldwide boosted demand. The Australian dollar rose against all 16 most-active currencies after central bank deputy governor Ric Battellino said the economy has entered a “new upswing,” fueling speculation policy makers will raise interest rates for a record third month next week.

“Japan’s trade data clearly indicates that overseas demand is recovering,” said Tomohiro Nishida, a dealer in Tokyo at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh- largest banking group. “The bullish remarks from the RBA also added to the revival of risk demand.”

The yen declined to 81.64 per Australian dollar as of 10:01 a.m. in Tokyo from 81.34 yesterday in New York. Australia’s currency advanced to 92.31 U.S. cents from 91.92 cents.

Japan’s currency was at 132.44 per euro from 132.47 yesterday in New York. The euro was at $1.4956 from $1.4968. New Zealand’s dollar fetched 72.55 U.S. cents from 72.58 cents in New York.

Japanese shipments abroad dropped 23.2 percent in October from a year earlier, compared with a 30.6 percent decline in September, the Finance Ministry said today in Tokyo. The median estimate of economists surveyed by Bloomberg was for a 26.8 percent decline.