Currencies
The yen rounded out its biggest weekly decline since March as the Bank of Japan sold its currency for the seventh time in two weeks, hoping a weaker yen would boost exporters' earnings and revive their economy. Speculation is strong that the yen sales, the most active effort by Japan to drive down its currency in six years, are tied to seasonal dollar selling by Japanese companies. Today was the last business day for the Japanese fiscal half year.

One goal of the yen sales might be to give companies a more favorable exchange rate at which to book overseas investments and bring home dollar-denominated earnings for the end of the fiscal half year. Exports generate about 10 percent of the country's economic output, and a cheaper yen makes Japanese products more competitive overseas.

The Ministry of Finance, which manages Japan's exchange rate policy, ordered intervention on three days the prior week and on four this last week. Japan hasn't sold yen so frequently in as brief a span of time since April 1995, when the yen reached a postwar high of 79.75 per dollar amid speculation the U.S. trade deficit with Japan would prompt the United States to weaken its currency. Government statistics suggest demand for yen isn't coming from overseas investors. Foreigners sold a net 1.3 trillion yen ($10.9 billion) worth of Japanese stocks and bonds in the first three weeks of the month, according to finance ministry data.

The euro retreated last week as strength in U.S. stocks stoked demand for dollars. A report showing strength in the Chicago manufacturing area also helped the dollar. Despite Friday's loss, the euro's climb against the dollar since the end of June is 7.4 percent, the biggest quarterly rally for the currency since it was introduced in January 1999.

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