Jan. 10 (Bloomberg) -- The yen rose against 15 of the 16 most-active currencies as a decline in Asian stocks spurred investors to cut overseas holdings of higher-yielding assets funded by loans in Japan.
The Japanese currency gained the most versus the British pound and Australian dollar as investors cut so-called carry trades on concern the global economy will cool. The pound also fell against the euro before the Bank of England meets on interest rates today, with a Credit Suisse index showing 61 percent odds of a cut in the benchmark from 5.5 percent.
``With stocks falling sharply, investors' tolerance of risk has been damaged,'' said Tetsuhisa Hayashi, chief currency trader in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan's largest publicly traded lender by assets. ``More than a few investors are selling overseas assets by paring carry trades.''
The yen climbed to 109.81 against the U.S. currency as of 8:13 a.m. in London from 110.04 yesterday in New York. It traded at 161.03 per euro from 161.31. The MSCI Asia Pacific Index of regional shares fell 1.2 percent, snapping two days of gains, and the Nikkei 225 Stock Average dropped 1.5 percent.
Japan's currency may rise to 90 a dollar by March 31, Hayashi forecast.
The euro traded at 74.97 pence after rising to a record high of 75.10 pence, and bought $1.4663 from $1.4659. European Central Bank policy makers also meet today and are forecast to keep borrowing costs at 4 percent. The Bank of England will announce its decision at noon in London and the ECB at 1:45 p.m. in Frankfurt.
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