(Bloomberg) – The yen fell for the first time in four days against the euro as signs economies in the Asia- region are gathering momentum damped demand for safer assets.
The Japanese currency weakened against all of its 16 major counterparts after New Zealand posted its first annual trade surplus since 2002 and Japan’s exports grew for a fifth-straight month in April. The euro traded near a four-year low against the dollar amid concern Europe’s fiscal woes will increase borrowing costs for the financial institutions.
“Asia-Pacific seems to be recovering faster than other regions,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd. “The yen may be sold against its crosses.”
The yen declined to 109.74 per euro as of 9:22 a.m. in Tokyo from 109.47 in New York yesterday. It rose to 108.84 against the euro on May 25, the most since November 2001. Japan’s currency slipped to 90.05 per dollar from 89.92. The euro bought $1.2187 from $1.2178. It reached $1.2144 on May 19, the lowest level since April 2006.
New Zealand’s trade surplus widened in April as imports of crude oil and machinery declined and rising commodity prices kept exports near record levels. The surplus increased to a more-than-forecast NZ$656 million ($437 million) from NZ$590 million in March, Statistics New Zealand said. In the year ended April, the nation posted a NZ$161 million surplus, the first since the 12 months to July 2002.
New Zealand’s dollar gained 0.3 percent to 66.48 U.S. cents from 66.29 cents yesterday, when it dropped 1.1 percent.
Japan Shipments
Japan’s shipments abroad advanced 40.4 percent from a year earlier, compared with a 43.5 percent gain in March, the Finance Ministry said today in Tokyo. The median estimate of 17 economists surveyed by Bloomberg was for a 38.3 percent gain.
The Washington-based International Monetary Fund yesterday urged the Italian government to curb public debt, adopt measures to increase economic growth and encourage lenders to boost capital to protect the banking system from instability.
“Markets remain wary, with the health of European banks increasingly a focus,” analysts led by Hans-Guenter Redeker, London-based global head of foreign-exchange strategy at BNP Paribas SA, wrote in a research note yesterday. “The euro is set to remain under pressure and the market environment will determine whether that weakness is emphasized against the dollar or on the crosses.”
China Holdings
The three-month dollar London interbank offered rate, or Libor, stood at 0.538 percent yesterday, according to British Bankers’ Association. The rate has risen 20 basis points over the past month.
The Financial Times reported, without saying where it got the information, that Chinese officials have been meeting with foreign bankers in recent days to review the country’s holdings of euro-zone debt in light of the region’s fiscal crisis.
The State Administration of Foreign Exchange, which manages the reserves under China’s central bank, holds about $630 billion of euro-area bonds in its reserves and has expressed concern about Greece, Ireland, Italy Portugal and Spain, the newspaper said. A spokesman for the agency declined to comment to the Financial Times.
–Editors: Rocky Swift, Nate Hosoda
To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Ben Levisohn in New York at blevisohn@bloomberg.net.
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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