Yen Climbs to Seven-Week High as Jobs Data Spur Safety Demand

New York - The yen advanced to a seven-week high against the euro and dollar as a report showing companies eliminated more jobs in August than economists forecast encouraged investors to take refuge.

Australia’s currency climbed versus all of its major counterparts as the nation’s economic growth unexpectedly accelerated in the second quarter. The yen rose versus the South Korean won and Norwegian krone as the Standard & Poor’s 500 Index dropped 0.4 percent.

“We are in a phase of risk aversion,” said Sebastien Galy, a currency strategist at BNP Paribas Securities SA in New York. “Data is improving, but not as much as people would like.”

The yen appreciated 0.5 percent to 131.52 per euro at 10:08 a.m. in New York, from 132.19 yesterday, after earlier reaching 131.04, the strongest level since July 15. Japan’s currency climbed 0.4 percent to 92.51 per dollar, from 92.92, after reaching 92.24, the strongest level since July 13.

Japan’s currency extended its gain versus the euro as ADP Employer Services reported that companies eliminated 298,000 workers from payrolls in August after a revised drop of 360,000 in the previous month. The median forecast of 32 economists surveyed by Bloomberg News was for a decrease of 250,000.

Employers in the U.S. cut payrolls by 225,000 workers last month, the smallest decline in a year, according to the median forecast of 77 economists in a separate Bloomberg News survey before a Sept. 4 report from the U.S. Labor Department.

Factory Orders

Orders placed with U.S. factories increased 1.3 percent in July after a 0.9 percent advance in the previous month, the Commerce Department reported today in Washington. The median forecast of 63 economists was for a 2.2 percent gain.

The yen rose 1.3 percent to 13.53 South Korean won and 1.1 percent to 15.08 versus the krone as the drop in stocks encouraged investors to reduce holdings of higher-yielding assets. The yen tends to gain in times of financial turmoil as Japan’s trade surplus reduces reliance on foreign capital.

The VIX Index, a measure of stock-market volatility known as Wall Street’s fear gauge, climbed to 29.49 today, the highest level since July 10, from 26.01 on Aug. 31.

Europe’s currency traded at $1.4213, compared with $1.4224 yesterday. Against the pound, it declined 0.5 percent to 87.58 pence, from 88.03 pence.

The economy of the 16 nations that use the currency contracted 0.1 percent in the second quarter after a record 2.5 percent drop in the previous period, the European Union’s statistics office affirmed today.

Aussie Climbs

The Australian dollar climbed against all of the 16 most- traded currencies tracked by Bloomberg after the Bureau of Statistics said in Sydney today that the nation’s gross domestic product expanded 0.6 percent in the second quarter from the previous three months. The median forecast of 20 economists surveyed by Bloomberg News was for a 0.2 percent expansion.

“The GDP number was a big surprise compared to market forecasts,” said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in Sydney. “Markets are rushing to front-load those rate hikes again, and consequently the currency has bounced.”

The Aussie, as the currency is known, climbed 0.6 percent to 83.07 U.S. cents after earlier falling to 82.41 cents, the lowest level since Aug. 27. The Australian dollar rose 0.1 percent to 76.87 yen.

Goldman Sachs Group Inc. raised its forecast for the Aussie, expecting it to rise to 87 cents in three and six months. The previous forecast was 82 cents for both periods. The New York- based firm predicted the Australian central bank will increase its benchmark interest rate by a half-percentage point in November, from 3 percent.

The firm also raised its forecast for the New Zealand’s dollar to 71 U.S. cents in three months and 67 cents in six months, from 60 cents and 58 cents. New Zealand’s dollar fell 0.7 percent to 67.02 cents and lost 1.1 percent to 62.08 yen.