The yen also dropped after days of gains against the Australian and New Zealand dollars as the Standard & Poor's 500 Index recovered from a 2.6 percent drop to advance for the first time this week. Amid obvious signals that losses on subprime mortgages are spreading, Japan's currency reached the highest level seen in a year against the dollar as well as a nine-month high versus the euro yesterday.
Paul Milton, chief dealer at Sydney, Australia-based Societe Generale, said “U.S. stocks ended up, which should lend some support to yen crosses.”
The drop cuts the yen's gain this week against the dollar to 3.4 percent, and 5.2 percent against the euro.