Yen Advances as Stocks Decline, Investors Reduce Carry Trades

The yen rose against all of the world's 16 most-active currencies as a slump in Asian stocks prompted investors to cut holdings of higher-yielding assets funded in Japan.

The yen climbed the most against the New Zealand dollar, a favorite of so-called carry trades. Japan's currency also advanced from the lowest level in more than a month against the dollar as Japanese exporters bought yen, betting it will resume a five-month rally.

``Falling share prices are causing risk reduction,'' said Hideki Amikura, deputy general manager of foreign exchange in Tokyo at Nomura Trust & Banking Co. Ltd., a unit of Japan's largest brokerage. ``This is buoying the yen.''

The yen rose to 113.02 against the dollar as of 7:00 a.m. in London from 113.27 on Dec. 14, when it fell to 113.60, the lowest since Nov. 7. The Japanese currency also climbed to 163.22 per euro from 163.45 on Dec. 14. Japan's currency may move between 111 and 114.30 per dollar for the rest of the year, Amikura forecast.

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