February 02, 2009

The yen rose a third day against the dollar and to a two-week high versus the euro as stocks fell and speculation a report will show a drop in U.S. manufacturing stoked demand for the Japanese currency as a refuge. The pound declined the most in almost two weeks on concern the U.K. banking crisis will deepen after Moody’s Investors Service cut the debt rating of Barclays Plc. U.S. manufacturing probably fell to the lowest level since 1980, adding to signs the global recession is worsening, a survey showed.
“The market is sticking to negative sentiment and investors are still very concerned about the economic outlook,” said Lutz Karpowitz, a Frankfurt-based currency strategist for Commerzbank AG, Germany’s second-biggest bank. “The yen is being supported by rising risk aversion.”