By Yasuhiko Seki and Ron Harui Jan. 5 (Bloomberg) -- The yen rose for a second day against the dollar on speculation Japanese exporters bought their own currency to bring home overseas earnings and as technical charts signaled recent declines were too rapid. The greenback traded near a one-week low against the euro before U.S. reports this week economists said will show factory orders rose for a third month and service industries rebounded, encouraging investors to buy higher-yielding assets. The South Korean won led gains in Asian currencies, reaching a 15-month high, as overseas investors plowed money into regional stocks on economic recovery signs. “There’s talk of large-sized buying of yen by exporters,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. “There’s also sentiment that the yen’s slump in December was excessive, so the currency is being bought back.” The yen rose to 91.78 per dollar as of 2:14 p.m. in Tokyo from 92.50 in New York yesterday. It climbed to 132.39 per euro from 133.34. The dollar traded at $1.4427 per euro from $1.4413 in New York yesterday, when it fell to $1.4456, the lowest level since Dec. 29. The won strengthened 1 percent to 1,142.10 per dollar after touching 1,140.55, the strongest level since September 2008. Exporters Buying Large Japanese manufacturers expect the yen to average 91.16 per dollar in the six months to March 2010, according to the Bank of Japan’s quarterly Tankan survey released last month. The yen also extended its rebound against higher-yielding currencies on speculation recent losses were too rapid. “There is an emerging view that recent sell-offs of the yen against higher-yielding currencies have gone too far according to technical charts,” said Shuzo Kakuta, senior foreign-exchange adviser at Tokyo Tomin Bank Ltd. South Africa’s rand reached 12.724 yen yesterday, the highest since October 2008, pushing its 14-day relative strength index, or RSI, to within a point of the 70 level that traders often take as a signal a currency is poised to fall after gaining rapidly. The yen rose against 15 out of its 16 most-active currencies after Reuters reported, without citing named sources, that Sumitomo Mitsui Financial Group Inc. will decide as early as tomorrow to raise some 800 billion yen ($8.7 billion) to boost its capital base. “Talks of new share issues by SMFG added to the rising momentum of the yen,” said Takashi Kudo, general manager of market information service in Tokyo at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. To contact the reporters on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net

Source