Sept. 1 (Bloomberg) -- The yen traded near a seven-week high against the dollar amid speculation asset prices are overblown, boosting demand for the relative safety of the Japanese currency. The yen may gain for a second day versus Singapore’s dollar after a technical chart signaled Asian stocks’ 61 percent rally since the March low was excessive. Australia’s dollar retreated from close to its highest level this year against the greenback after the nation’s central bank held interest rates at a half- century low of 3 percent and said monetary policy is appropriate. “Investors are turning risk averse amid worries over the sustainability of the economic rebound,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The bias is for the yen to strengthen.” The yen traded at 93.02 per dollar as of 1:48 p.m. in Tokyo from 93.13 in New York yesterday, when it rose to 92.55, the highest level since July 13. The currency was at 133.42 per euro from 133.48. The euro bought $1.4345 from $1.4334. It touched $1.4406 on Aug. 27, the strongest level since Aug. 7. The Australian dollar fell to 84.18 U.S. cents from 84.39 cents. It reached 84.78 cents on Aug. 14, the highest level since Sept. 22, 2008. It declined to 78.29 yen from 78.57 yen. Japan’s currency traded at 64.57 versus Singapore’s dollar from 64.61 yesterday. The MSCI Asia Pacific Index of regional shares advanced 0.5 percent today, having rallied 61 percent since March 9, when it had dropped to the lowest in more than five years. Technical Charts The stock index’s 14-day stochastic oscillator climbed to 79.9 today from 69.5 yesterday, close to the 80 threshold that indicates an asset price may have risen too fast and is poised to decline. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in an asset’s value. Benchmark interest rates are 0.1 percent in Japan and as low as zero in the U.S., compared with 3 percent in Australia, making the South Pacific nation’s assets attractive to investors seeking higher returns. The risk in such trades is that currency market moves may erase any profits. Yen strength was limited after a Chinese government report showed the nation’s manufacturing expanded in August at the fastest pace in 16 months, allaying concerns the country’s economic recovery may falter. The official Purchasing Managers’ Index rose to a seasonally adjusted 54 from 53.3 in July, the Federation of Logistics and Purchasing said today in Beijing in an e-mailed statement. A reading above 50 indicates an expansion. ‘Positive Track’ “The data suggest the Chinese economy may be on a positive track,” said Masashi Kurabe, head of currency sales and trading at Bank of Tokyo-Mitsubishi UFJ Ltd. in Hong Kong. “It could be supportive for risk appetite and mildly negative for the yen.” The yen posted a monthly gain in August versus all of the 16 most-traded currencies tracked by Bloomberg except for the New Zealand dollar, rising 1.8 percent against the greenback and 1.1 percent versus the euro. The U.S. dollar declined 0.5 percent against the euro in August. Australia’s dollar fell for the first time in four days against its U.S. counterpart after Reserve Bank of Australia Governor Glenn Stevens said in a statement today the central bank’s current stance of keeping borrowing costs low to foster economic growth is appropriate.

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