By Ron Harui Dec. 7 (Bloomberg) -- The yen strengthened against the euro and the dollar, ending four days of losses, on speculation Japanese companies are bringing back overseas earnings. Japan’s currency also gained as exporters took advantage of its biggest weekly decline in a decade against the dollar to purchase it. The yen rose versus all of its 16 major counterparts on the prospect companies such as Mitsubishi UFJ Financial Group Inc. and Hitachi Ltd. will repatriate funds from share sales. The dollar weakened versus the euro before Federal Reserve Chairman Ben S. Bernanke speaks today in Washington. “There’s talk the Japanese firms which are undertaking capital increases will repatriate the proceeds of overseas share offerings into yen over the next couple of weeks,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “This is a factor for buying the Japanese currency.” The yen advanced to 133.98 per euro as of 6:34 a.m. in London from 134.54 in New York on Dec. 4. The currency climbed to 89.94 per dollar from 90.56, following a 4.5 percent slump last week, the most since February 1999. The dollar fell to $1.4893 per euro from $1.4858 on Dec. 4, when it rose to $1.4822, the strongest since Nov. 20. Share Sales Mitsubishi UFJ plans to offer about 1 trillion yen ($11.1 billion) of stock, according to documents sent to investors. The price for the sale will be set as early as Dec. 14, said Daiwa Securities Group Inc., one of the underwriters. Hitachi said in a statement last month it may sell 400 million shares to Japanese investors and 600 million shares to overseas buyers at a price to be set between Dec. 7 and Dec. 10. The yen advanced as Japanese exporters were attracted by the currency’s 4.5 percent slide last week. A weaker yen makes domestic goods less expensive abroad and increases the value of earnings made overseas. “Exporters may start hedging substantially for the new fiscal year starting April 2010 sooner rather than later,” Tohru Sasaki, chief currency strategist in Tokyo at JPMorgan Chase & Co., wrote today in an e-mail to Bloomberg. “As exports increase steadily along with the global economic recovery, there is much incentive to sell the dollar above 90.” Large Japanese manufacturers expected the yen to average 94.50 per dollar in the 12 months to March 2010, according to the Bank of Japan’s quarterly Tankan survey released Oct. 1. The forecast in the previous report was for a rate of 94.85. Bernanke, Yields The dollar fell from near a two-week high against the euro on speculation Bernanke will seek to temper the recent increase in long-term U.S. yields amid signs of a recovery in the world’s largest economy. “The latest increase in U.S. yields is not a good thing for the economic rebound so Bernanke may try to curb this,” said Toshihiko Sakai, head of trading for foreign exchange and financial products at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. “The trend of dollar weakness is still intact.” The yield on the benchmark 10-year Treasury rose nine basis points on Dec. 4, according to data compiled by Bloomberg. The yield reached 3.51 percent, the highest since Nov. 12. Employers in the U.S. cut 11,000 jobs in November, the fewest since the recession began, the Labor Department reported on Dec. 4. The median forecast of economists in a Bloomberg survey was for a reduction of 125,000 jobs. The unemployment rate fell to 10 percent from 10.2 percent. “Realistically, it is far too early to believe that the peak in the unemployment rate has passed and we could see it nudge higher next year,” John Kyriakopoulos, head of currency strategy in Sydney at National Australia Bank Ltd., wrote in a research note today. “On that basis, it is hard to read much into the data for Fed policy.” Fed Rate Bets Futures on the Chicago Board of Trade showed a 53 percent chance the Fed will raise the target lending rate by at least a quarter-percentage point by its June meeting, up from 31 percent a week ago. A report from the Commodity Futures Trading Commission showed futures traders increased bets to the most in 1 1/2 years that the yen will strengthen versus the greenback. “The positioning data point to the market being vulnerable to a corrective rally in the dollar,” David Forrester, a currency economist in Singapore at Barclays Capital, wrote in a research note today. “Net long yen was the most popular position in the Group of 10” currencies, he said. The difference in the number of wagers by hedge funds and other large speculators on an advance in the yen compared with those on a drop -- so-called net longs -- was 56,907 on Dec. 1, the most since March 2008, compared with net longs of 51,710 a week earlier. Futures positions, when they reach an extreme, are viewed as a contrarian indicator because traders often seek to cut positions when momentum in a currency shifts. The Dollar Index, which IntercontinentalExchange Inc. uses to track the dollar against the currencies of six major U.S. trading partners, declined 0.5 percent to 75.529. To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net.

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