Yield Demand tempers send yen and dollar gain

The yen and the dollar rose against the euro on speculation declines in stocks will prompt investors to reduce holdings of higher-yielding assets.

The greenback gained for a third day versus Europe’s single currency on speculation the European Central Bank will cut interest rates this week. South Korea’s won was the biggest loser among the 16 most-active currencies versus the dollar today on prospects that importers and banks are taking advantage of this month’s advance to pay bills.

The tumble in equities is sparking some risk aversion among investors. The yen and the dollar are likely to be bought.

The yen advanced to 129.50 per euro. Japan’s currency traded at 97.71 per dollar. The dollar rose to $1.3255 per euro. It climbed to $1.4237 per British pound. The U.S. currency increased 2 percent to 1,374.65 versus the won.