Dec. 11 (Bloomberg) -- The yen declined to a one-month low versus the dollar and the euro on speculation the Federal Reserve will cut interest rates today, encouraging investors to buy higher-yielding assets funded by loans in Japan.
Japan's currency fell the most against the Australian and New Zealand dollars, favorites for so-called carry trades, as global equities advanced and investors bet a rate reduction will support the global economy. Futures contracts show investors see a 100 percent likelihood the Fed will lower its benchmark overnight rate by at least a quarter-percentage point to 4.25 percent to keep a housing slump from sparking a recession.
``Stock markets have shown signs of stabilizing, and that will make investors more comfortable to sell the yen,'' said Tokichi Ito, deputy general manager of foreign exchange in Tokyo at Trust & Custody Services Bank Ltd., a unit of Japan's second- largest publicly traded lender.
The yen declined to 111.94 per dollar, the lowest since Nov. 9, before trading at 111.76 at 12:35 p.m. in Tokyo from 111.71 late in New York yesterday. It may fall to 112.20 today, Ito said. Japan's currency also slipped to 164.66 per euro, the weakest since Nov. 9, before trading at 164.54 from 164.33.
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