Reply #13: Yen Gains Versus Euro on Concern Credit Markets Losses to Widen [View All]

[Ghost Dog]

Feb. 20 (Bloomberg) -- The yen rose against all 16 of the most-active currencies on concern widening credit-market losses will prompt traders to reduce holdings of higher-yielding assets funded in Japan.

The currency gained the most against the South African rand and the Norwegian krone after KKR Financial Holdings LLC, the publicly traded affiliate of private equity firm Kohlberg Kravis Roberts & Co., delayed repayment of its asset-backed commercial paper for the second time. Alliance & Leicester Plc, a U.K. mortgage lender, said profit slumped 67 percent in the second half as funding costs rose.

``We could see the yen gain further,'' said Tadahiko Nashimoto, director of foreign exchange at Barclays Bank Plc based in Tokyo. ``Concerns that credit markets will tighten are likely to weigh on sentiment. This makes everyone reluctant to take risk.''

The yen advanced to 158.18 against the euro as of 8:26 a.m. in London from 158.71 late yesterday in New York. It rose to 107.54 per dollar from 107.78. The euro declined to $1.4697 from $1.4725. The yen may rise to 107.20 versus the dollar today, Nashimoto forecast.

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