The yen fell the most in two weeks against the euro and dropped for the first time in six days versus the dollar as a rebound in Asian stocks bolstered investor confidence in higher-yielding assets.
The yen also declined on speculation Japan's central bank will sell the currency for the first time since March 2004 to help exporters. Japanese Finance Minister Shoichi Nakagawa said yesterday the government is ready to act if needed to halt gains in the yen, which earlier traded near a 13-year high against the dollar and its strongest since May 2002 versus the euro.
Japan's Economic and Fiscal Policy Minister Kaoru Yosano said in Tokyo today that abrupt increases in currency volatility are undesirable. The yen has appreciated this month against all of some 170 global currencies tracked by Bloomberg, eroding Japanese exporters' overseas income.
Gains in the common European currency may be limited after European Central Bank President Jean-Claude Trichet said yesterday he may cut interest rates next week. Europe's economy is on the brink of a recession, with the region's manufacturing and service industries contracting at a record pace in October and German business confidence dropping to a five-year low.
Investors are betting the ECB will lower borrowing costs further by June after cutting the main refinancing rate by a half point to 3.75 percent on Oct. 8. The implied yield on the three-month Euribor contract expiring in June fell to 3.020 percent today from 3.225 percent a week earlier.
EUR/USD having tested low on $1.2330, the pair has raised in area $1,2580.
GBP/USD having established session lowon $1,5400, the rate has grown in area $1,5760 then has again receded below a mark $1,5600.
USD/JPY the pair has shown session high at level Y96,20. Then it was corrected in area Y94,50.
UK data at 1100GMT sees September Land Registry House Prices as well as the CBI distributive trades survey.
At 14:00 GMT will be published US Consumer confidence (October).
At 21:45 GMT trade balanc of New Zealand will be published.