Yen falls, gold rises on Asian markets

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The yen weakened yesterday on speculation the Bank of Japan will this week maintain monetary stimulus while central banks tighten policy elsewhere. Meanwhile, gold rose to another record, oil gained for a fourth day and wheat reached a two-month high.

Japan's currency dropped to 119.60 per euro in Tokyo from 119.24 in New York last week.

Gold advanced for a ninth day, crude increased 0.3 per cent in New York and wheat jumped 2.1 per cent. The MSCI Asia Pacific Index slid 0.3 per cent as companies from Posco to Acer reported lower profits, while the Shanghai Composite Index retreated 0.7 per cent on concern inflation will accelerate.

The Bank of Japan is set to hold borrowing costs near zero on April 28, with data forecasts to show retail sales sank last month after the earthquake.

The bank may cut its forecast for real growth this year to 0.8 per cent from 1.6 per cent as a result of the March 11 earthquake, the Nikkei newspaper reported yesterday.

The central bank will keep its benchmark interest rate at a range between zero and 0.1 per cent at its next meeting.

Australia's dollar traded at US$1.0724 after earlier rising to a record US$1.0776.

The Singapore dollar was little changed at S$1.2350 versus the greenback after touching S$1.2318.

The Malaysian ringgit gained as much as 0.4 per cent to 2.9913, the strongest level since October 9, 1997, on speculation the central bank will raise interest rates next month.

"There's the perception central banks in Asia are allowing their currencies to appreciate to curb imported inflation," said Lee Wai Tuck, a strategist at Forecast in Singapore. There are some concerns that if currencies do not appreciate, inflation may go even higher" in countries including China and Singapore.

Gold for immediate delivery rose as much as 0.6 per cent to a record US$1515.88 an ounce as investors sought precious metals as a store of value. Wheat increased as much as 2.7 per cent to US$8.57 a bushel before trading at US$8.5225.

Oil for June delivery increased 0.3 per cent to $112.57 a barrel on the New York Mercantile Exchange.

- BLOOMBERG