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By John Beresford-Peirse
The yen rose to a two-week high against the euro and dollar as Japanese investors sold European bonds, bringing the proceeds home, analysts said.
The benchmark 10-year German bond has risen 2.9 percent in the past month, including reinvested interest, according to Bloomberg analytics. That's prompted some investors to sell euro- denominated bonds for yen assets. With the euro little changed against the dollar, the yen's move also boosted it against the U.S. currency, analysts said.
``Japanese investors are modestly repatriating overseas bond holdings,'' said Shahab Jalinoos, a currency strategist at UBS Warburg. ``Bond markets have rallied and there's been some profit- taking. This move is being led by euro-yen.''
The yen strengthened to 108.72 per euro from 109.27 yesterday. Against the dollar, it gained to 121.15 from 121.80. It was the yen's highest level against both currencies since Oct. 22. The dollar was little changed against the euro at 89.75 U.S. cents from 89.71.
The yen's ascent against the dollar accelerated after orders to automatically sell dollars against the Japanese currency were triggered at about 121.50, said Mark Austin, a currency strategist at HSBC Bank.