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Yen Advances on Signs of European Slowdown; Norway’s Krone Jumps

Feb. 10 (Bloomberg) -- The yen strengthened for the first time in three days against the dollar and euro as reports showing French and Italian industrial production both declined boosted demand for haven assets.

Japan’s currency rose versus all except two of its 31 major counterparts even as the Ministry of Finance said the nation’s current-account deficit widened to a record. Norway’s krone jumped the most in three weeks against the euro after inflation quickened more than economists predicted. The Australian dollar fell before a government report this week that economists said will show the jobless rate increased. Hungary’s forint and South Africa’s rand led losses among emerging-market currencies.

“The yen is trading more strongly as a result of a small increase in risk aversion,” said Peter Kinsella, a senior currency strategist at Commerzbank AG in London. “Though frankly the Japanese data show that Japan could well end up becoming reliant upon capital imports, which is a disaster for Japan longer term.”

The yen gained 0.2 percent to 102.14 per dollar as of 7:11 a.m. in New York after sliding to 102.64, the weakest level since Jan. 31. Japan’s currency rose 0.2 percent to 139.22 per euro after dropping 1.6 percent during the previous two days. The euro was little changed at $1.3632.

French industrial production declined 0.3 percent in December after climbing a revised 1.2 percent the previous month, according to the state statistical institute Insee. Italy’s factory output dropped 0.9 percent after increasing 0.3 percent in November.

Yen’s Advance

The yen has appreciated 4.2 percent this year, after sliding 17 percent in 2013, according to Bloomberg Correlation- Weighted Indexes that track 10 developed-nation currencies. The euro dropped 0.2 percent since Dec. 31, while the dollar gained 0.7 percent.

Japan’s current-account deficit, the broadest measure of trade, widened to 638.6 billion yen, the most in data going back to 1985, according to the finance ministry report. Overseas investors cut their holdings of the nation’s bonds by 1.26 trillion yen in the final month of last year, the most since September, the data showed.

Euro-area industrial production fell 0.3 percent in December, after gaining 1.8 percent the previous month, according to the median forecast of economists in a Bloomberg News survey before the data is released on Wednesday.

‘Remains Challenging’

“The fundamental outlook for the euro zone remains challenging,” Citigroup Inc. analysts including Steven Englander, global head of Group-of-10 foreign-exchange strategy in New York, wrote today in a research note. “The recent euro resilience need not herald the beginning of the next uptrend in the single currency.”

The krone strengthened for a second day against the euro after Statistics Norway said consumer prices rose 2.3 percent in January from a year earlier, after increasing 2 percent in December. Economists surveyed by Bloomberg news predicted an increase of 2 percent.

Norway’s currency rallied 0.9 percent to 8.3503 per euro, the biggest gain since Jan. 17, and advanced 0.8 percent to 6.1255 per dollar.

Australia’s dollar fell against all but three of its 16 major counterparts after Toyota Motor Corp. said it will stop making cars in the country by the end of 2017, citing high manufacturing costs.

The unemployment rate climbed to 5.9 percent last month, the highest since June 2009, according to a Bloomberg survey before the statistics bureau report on Thursday.

The Aussie weakened 0.3 percent to 89.29 U.S. cents after appreciating to 89.99 cents on Feb. 7, the strongest level since Jan. 14.

The forint weakened 1.1 percent to 228.27 per dollar and the rand slid 0.8 percent to 11.1478. An index of emerging- market currencies compiled by Bloomberg dropped 0.2 percent after rising 0.8 percent last week.

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