The yen slipped to the weakest level in almost two months versus the dollar as speculation that the Bank of Japan will boost stimulus measures sapped demand for the nationâ€™s assets as a haven.
Japanâ€™s currency was set for its longest run of declines against the dollar since April 2011 as Treasury two-year yields reached the highest in two months relative to Japanese peers. The euro snapped a two-day gain versus the dollar as German Chancellor Angela Merkel said the regionâ€™s debt crisis wonâ€™t be quickly solved. The krona rose to a two-week high versus the euro as Swedenâ€™s central bank governor said there are risks in keeping interest rates low.
â€œThe rise in U.S. bond yields is certainly consistent with a weakness in the dollar-yen,â€ Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York, said in a telephone interview. â€œThatâ€™s a dynamic thatâ€™s been relevant for price action over the last few days.â€