By Bo Nielsen and Oliver Biggadike Nov. 25 (Bloomberg) -- The dollar approached a 14-year low against the yen as the Federal Reserve’s signal that it will tolerate a weaker greenback encouraged investors to buy higher- yielding assets outside the U.S. The greenback extended its drop versus Japan’s currency after breaking 88 for the first time in 10 months. The Swiss franc appreciated to parity versus the dollar for the first time since April 2008. Russia’s central bank plans to add Canadian dollars to its reserves to reduce a reliance on U.S. currency. “Markets took it as if the Fed gave a green light to sell the dollar,” said Geoffrey Yu, a currency strategist at UBS AG in London. “At the same time, it seems that all central banks are sounding a bit more positive.” The dollar dropped 1.1 percent to 87.53 yen at 9:50 a.m. in New York, from 88.50 yesterday, after falling to 87.39, the lowest level since Jan. 21. On that day, it touched 87.13, the weakest since July 1995. The dollar depreciated 0.5 percent to $1.5050 per euro from $1.4968 yesterday, after reaching $1.5096, the weakest level since August 2008. South Africa’s rand gained 1 percent to 7.3910 versus the dollar and the Swedish krona appreciated 0.3 percent to 6.8892 on speculation investors will increase carry trades, in which they buy higher-yielding assets with amounts borrowed in nations with low interest rates. The benchmark lending rate of zero to 0.25 percent in the U.S. makes its currency popular for funding such transactions. The Swiss franc strengthened as much as 0.9 percent to 0.9994 per U.S. dollar a day after Swiss National Bank President Jean-Pierre Roth said in Geneva yesterday that central banks may “soon” start withdrawing unconventional measures as the global economy gains strength. To contact the reporters on this story: Oliver Biggadike in New York at obiggadike@bloomberg.net; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net

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