By Matthew Brown and Oliver Biggadike Nov. 19 (Bloomberg) -- The yen and dollar strengthened against the euro as stock markets fell, discouraging demand for higher-yielding assets. Japan’s currency rose against all of its 16 most-traded counterparts tracked by Bloomberg as equities weakened. The New Zealand dollar was headed for the worst performance against the greenback in the past month among major currencies as the nation’s main opposition party ended its support for the central bank’s priority of containing inflation. “It’s a risk-off day,” said Daragh Maher, deputy head of global foreign-exchange strategy in London at Calyon, the investment-banking unit of Credit Agricole SA. “Equity markets are down, and in that kind of environment the dollar and the yen get bid.” The yen appreciated 1.2 percent to 132.06 per euro at 10:33 a.m. in New York, from 133.64 yesterday. It earlier climbed to 131.76, the strongest level since Nov. 3. Japan’s currency advanced 0.6 percent to 88.77 against the dollar, from 89.32. The dollar appreciated 0.6 percent to $1.4875 versus the euro, from $1.4963. The Dollar Index, which InterContinental Exchange Inc. uses to track the dollar against the currencies of six major U.S. trading partners including the euro, advanced 0.4 percent today to 75.462. U.S. initial unemployment claims were unchanged at 505,000 in the week ended Nov. 14, the Labor Department reported today. The median forecast of 42 economists in a Bloomberg survey was for an increase to 504,000 from a previously reported 502,000. Weaker Pound The pound fell for a third day versus the dollar, dropping 0.7 percent to $1.6624. Sterling was little changed at 89.37 pence per euro. U.K. banks are in a worse state than those elsewhere, the Telegraph cited Experian Plc, the world’s largest credit- checking company, as saying. “There are ongoing concerns about the state of the banking sector in the U.K., and that is weighing on sterling,” Jeremy Stretch, a senior currency strategist in London at Rabobank International, said in an interview on Bloomberg Television. “Any move up towards the 90 pence per euro mark is a good level to short euro-sterling again.” A short is a bet that a currency will decline. New Zealand’s dollar declined as much as 2.4 percent to 72.81 U.S. cents, its biggest intraday drop since Oct. 28, and slid as much as 2.9 percent to 64.70 yen. The kiwi has depreciated 3.6 percent versus the greenback in the past month. N.Z. Policy The nation’s main opposition Labour Party will no longer support the Reserve Bank’s primary policy of targeting inflation, saying it wants a competitive exchange rate and lower borrowing costs. Japan’s currency strengthened versus the euro as the Nikkei 225 Stock Average fell as much as 1.9 percent, the most since Nov. 2. The dollar also gained versus the euro on speculation traders trimmed short positions after the currency failed to weaken beyond $1.50 per euro, according to Daisaku Ueno, an analyst in Tokyo at Gaitame.Com Research Institute Ltd., a unit of Japan’s largest currency margin company. “The euro is struggling to rise above $1.50, a level that puts invisible pressure on investors,” Ueno said. To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net; Oliver Biggadike in New York at obiggadike@bloomberg.net

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