20130111 0929 Global Markets Related News.

Asia FX By Cornelius Luca - Thu 10 Jan 2013 17:15:49 CT (www.lucafxta.com/CME)
The appetite for risk surged on Thursday following the burgeoning Chinese trade surplus and after the ECB and BoE left rates unchanged. The markets got confirmation that the world economy will at least muddle along and that the ECB will not interfere with the regional soft production. All European and commodity currencies surged, while the yen drilled down toward a 28-month low. The Australian dollar climbed up to a new high for the uptrend. The US stock markets closed higher. Gold, oil and silver advanced as well. The short-term outlook for the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is long on European currencies and commodity currencies, and short yen. Good luck!

Overnight
US: The initial jobless claims rose 4,000 to 371,000 in the week ended January 5th from the previous week's revised figure of 367,000.
Canada: Building permits contacted 17.9% in November after expanding 15.9% in October.
Canada: The New Housing Price Index edged up 0.1% in November, slower than 0.2% in October.

Today's economic calendar
China: Consumer Price Index for December
Japan: Current account for November
Japan: Eco watchers survey: current for December

Asian Stocks Rise as Stimulus Bets Boost Japan Shares (Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its eighth weekly advance, as Japanese shares gained after a larger-than-expected current account deficit added to speculation Prime Minister Shinzo Abe will announce more stimulus measures.
Honda Motor Co. (7267), which gets 81 percent of sales overseas, climbed 1.8 percent as the yen fell for a third day, boosting the outlook for overseas income at Japanese exporters. Fast Retailing Co. (9983) rose 3.1 percent in Tokyo after Asia’s largest apparel retailer raised its annual profit forecast. Newcrest Mining Ltd., Australia’s biggest gold producer, added 0.8 percent after the price of the metal jumped.
The MSCI Asia Pacific Index (MXAP) gained 0.2 percent to 132.28 as of 9:36 a.m. in Tokyo, before markets open in Hong Kong and China. The benchmark gauge is heading for a 0.3 percent advance this week, extending gains to an eighth week, the longest streak since March 2012 as the U.S. Congress approved a budget deal and Japanese shares rallied on expectations the nation’s new government would call for more stimulus.
“There is significant scope for the equity market to outperform in 2013 if Abe’s promised reforms are undertaken,” said Sean Darby, chief global equity strategist at Jefferies Group Inc. in Hong Kong. “A weaker yen would be beneficial for export-led sectors such as the automobile, electronics and machinery sectors.”

Nikkei 225 Heads for Longest Weekly Win Streak Since 1988 (Bloomberg)
Jan. 11 (Bloomberg) --　Japanese stocks rose a third day, with the Nikkei 225 (NKY) Stock Average poised to advance for a ninth week, as the yen slid on speculation the government will announce more public works spending.
Canon Inc. (7751), a camera maker that gets 80 percent of its revenue outside Japan, added 1.2 percent. Fast Retailing Co. (9983), Asian’s biggest apparel chain, climbed 3.2 percent after raising its annual profit forecast.
The Nikkei 225 gained 1.5 percent to 10,809.20 as of 9:32 a.m. in Tokyo, with the gauge headed for its longest streak of weekly advances since December 1988. The broader Topix Index advanced 1.2 percent to 899.83, with all 33 of its industry groups advancing.
“Finally, we are seeing recovery signs in Japanese stocks with politics moving in the right direction,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of about $70 billion. “The government needs to boost the economy and tax revenue to be able to rehabilitate its fiscal woes.”

S&P 500 Rises to 5-Year High Amid Chinese Export Data (Bloomberg)
U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level in five years, amid better-than-estimated data on Chinese exports.
Financial shares had the biggest gain in the S&P 500 among 10 industry groups as Bank of America Corp. and Morgan Stanley rallied at least 3 percent. Ford (F) Motor Co. climbed 2.7 percent after boosting its dividend. Supervalu Inc. (SVU) rose 14 percent as a Cerberus Capital Management LP-led investor group agreed to buy five of its chains in a deal valued at about $3.3 billion. Tiffany & Co. (TIF) slumped 4.5 percent as the jewelry retailer said full-year earnings will be at the low end of its forecast.
The S&P 500 advanced 0.8 percent to 1,472.12 at 4 p.m. New York time, the highest level since December 2007. The Dow Jones Industrial Average added 80.71 points, or 0.6 percent, to 13,471.22. About 6.8 billion shares changed hands on U.S. exchanges, or 9.9 percent above the three-month average.
“The market is encouraged by evidence of healing on the international front,” said Alan Gayle, senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “In the U.S., the earnings season is just getting started and there’s a lot of things that we don’t know. Investors will still be on that wait-and-see mode.”
Equities followed global shares higher as China’s overseas sales rose 14.1 percent in December from a year earlier, almost triple the 5 percent gain predicted. European Central Bank President Mario Draghi said the euro-area economy will slowly return to health in 2013 as the region’s bond markets stabilize after three years of turmoil. More Americans than forecast filed applications for unemployment benefits last week.

European Stocks Drop From 22 Month-High; Richemont Falls (Bloomberg)
European (SXXP) stocks declined from a 22- month high as European Central Bank policy makers kept the benchmark interest rate at a record low.
Cie. Financiere Richemont SA fell 2.1 percent after peer Tiffany & Co. said full-year earnings will be at the lower end of its forecast. Sanofi (SAN) lost 0.7 percent after U.S. regulators cut the recommended dosage of some drugs including those sold by the French company. Nokia (NOK1V) Oyj surged 11 percent after saying its handset business probably saw a profit in the fourth quarter.
The Stoxx Europe 600 Index retreated 0.3 percent to 287.44 at the close of trading. The gauge last week surged 3.3 percent after U.S. lawmakers agreed on a compromise budget to prevent most scheduled tax increases and delay spending cuts.
“We’ve seen a slightly less accommodating ECB in terms of movement on rates,” said Michael Hewson, a market analyst at CMC Markets Plc in London. “That caution has been tempered by concerns about the economic outlook. Markets are at multi-month highs. Given how skittish investors are, it wouldn’t take much to trigger a small sell-off.”
The volume of shares changing hands on Stoxx 600 companies was 85 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
ECB policy makers meeting in Frankfurt today left the benchmark rate at a record low of 0.75 percent, as predicted by 50 out of 55 economists in a Bloomberg News survey.

Emerging Stocks Climb as China Trade Data Boosts Shippers (Bloomberg)
Emerging-market stocks climbed the most in a week, boosted by companies tied to economic growth, as better-than-estimated Chinese trade figures added to signs the Asian nation is emerging from its slowdown.
China Southern Airlines Co. (1055) and China Cosco Holdings Co. (1919), climbed at least 7 percent in Hong Kong, leading gains among airlines, shipping companies and raw-material producers. Vietnamese stocks entered a bull market as the prime minister reiterated that the central bank must pursue policies this year that boost growth. Cia. Hering, Brazil’s third-biggest apparel retailer, slumped the most since June 2009 on weaker sales. The MSCI EM Eastern Europe Index climbed to a four-month high.
The MSCI Emerging Markets Index (MXEF) rose 0.4 percent to 1076.99 in New York, the steepest advance since Jan. 3. China’s exports increased 14.1 percent in December from a year earlier, while imports added 6 percent, the customs office said today. The European Central Bank kept its benchmark interest rate on hold as its president, Mario Draghi, said a gradual recovery in the euro-area economy should start later this year.
“That’s some good news on the European economic growth front and will attract investors to look into eastern European emerging markets,” Esther Law, the director of emerging-market strategy at Societe Generale SA in London, said in a phone interview today. “The China exports number is also quite encouraging and external demand is recovering. This is a genuinely good number.”

Yen Drops to 2010 Low on Stimulus Bets, Deficit Concern (Bloomberg)
The yen touched the weakest level since June 2010 against the dollar on speculation the Bank of Japan (8301) will cooperate with Prime Minister Shinzo Abe’s government to ramp up efforts to stimulate the economy.
Japan’s currency extended its ninth week of declines after posting wider-than-expected current account and trade deficits. Demand for the yen was also limited as the BOJ may increase its fiscal 2014 inflation forecast at this month’s policy meeting. The euro remained higher against the greenback after yesterday’s biggest gain in five months before a report that may show the region’s industrial output increased.
“The expectation of monetary and fiscal stimulus under the Abe administration has been driving yen weakness,” said Kikuko Takeda, a senior currency economist in London at Bank of Tokyo- Mitsubishi UFJ Ltd. “It’s no surprise that the currency has been weakening in an environment where Japan continues to post trade deficits. I still think we need to see more reasons to see the yen dropping to the 100 level” versus the dollar.
The yen touched 89.35 per greenback, the weakest since June 29, 2010, before trading at 89.19 at 9:26 a.m. in Tokyo, 0.5 percent lower than yesterday’s close. The Japanese currency depreciated 0.5 percent to 118.35 per euro, after earlier dropping to 118.59, the weakest since May 2011. Europe’s shared currency was little changed at $1.3269 from $1.3272 yesterday, when it rose 1.6 percent, the biggest jump since Aug. 3.

Aussie Dollar Touches 4-Month High on Global Growth (Bloomberg)
The Australian dollar touched a level that matched the highest in almost four months as a brighter economic outlook in the world’s biggest economies spurred demand for higher-yielding assets.
The so-called Aussie headed for a second-straight weekly advance before a report today that may show the U.S. trade deficit narrowed. The currency strengthened yesterday after European Central Bank President Mario Draghi said the euro-area economy will slowly return to health this year. The New Zealand dollar, also known as the kiwi, rose to a three-week high as commodities gained the most in two weeks.
“The global backdrop is improving for the Australian dollar,” said Hans Kunnen, the chief economist at St. George Bank Ltd. in Sydney. “Risk appetite has increased.”
The Australian dollar bought $1.0580 as of 11:03 a.m. in Sydney after earlier rising to $1.0599, matching yesterday’s high that was the strongest level since Sept. 14. It added 0.3 percent to 94.36 yen. New Zealand’s currency touched 84.61 U.S. cents, the most since Dec. 17, before trading at 84.33, 0.3 percent below yesterday’s close. It climbed 0.2 percent to 75.22 yen.
The Aussie climbed 1 percent versus its U.S. counterpart this week. The kiwi has risen 1.4 percent since Jan. 4.
Australia’s 10-year bond fell, pushing the yield up five basis points, or 0.05 percentage point, to 3.5 percent, the highest since Aug. 17. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates which is sensitive to interest-rate expectations, was little changed at 2.81 percent.
The Thomson Reuters/Jefferies CRB Index (CRY) of raw materials gained 0.9 percent yesterday, the biggest increase since Dec. 26. Physical iron ore with 62 percent content at the Chinese port of Tianjin advanced to $158.50 a ton on Jan. 8, the highest close since October 2011, according to The Steel Index Ltd.
In the U.S., the gap between imports and exports probably narrowed to $41.3 billion in November from $42.2 billion in the previous month, according to the median estimate of economists surveyed by Bloomberg News. The Commerce Department is due to release the figures today.

Jobless Claims in U.S. Unexpectedly Increased Last Week (Bloomberg)
More Americans than forecast filed applications for unemployment benefits last week, a sign improvement in the labor market remains uneven.
Jobless claims increased by 4,000 to 371,000 in the week ended Jan. 5, Labor Department figures showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a drop to 365,000. The prior week’s figures were revised to 367,000 from an initially reported 372,000.
A consistent decline in firings, along with a rise in payrolls, is needed to spur consumer spending, the biggest part of the economy. While an agreement reached by Congress this month averted sweeping tax increases and delayed budget cuts that threatened the expansion, the impending battle over the debt limit may weigh on the outlook for jobs.
“Claims are in a pretty steady range, but the story isn’t in firings so much as it is in hiring,” said Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York, who projected 375,000 claims for the week. “Hiring has been okay. The process is sluggishly moving forward. We need to see better payrolls data to get faster economic growth.”
Estimates in the Bloomberg survey of economists ranged from 340,000 to 380,000. No state data were estimated, according to a Labor Department official, who said there was “nothing unusual” in the figures.
Stock-index futures maintained gains after the figures, with the contract on the Standard & Poor’s 500 Index expiring in March rising 0.4 percent to 1,461.9 at 8:43 a.m. in New York.
The four-week moving average, a less volatile measure than the weekly figures, climbed to 365,750 last week from 359,000.

Fed’s Bullard Sees Difficulty Tying QE to Economic Levels (Bloomberg)
Federal Reserve Bank of St. Louis President James Bullard said it may be difficult to tie the central bank’s $85 billion monthly bond purchases to numerical levels of unemployment and inflation.
After settling a debate over how long to hold interest rates near zero, Fed officials are discussing when to halt their purchases of Treasuries and mortgage-backed securities. At its December meeting, the Federal Open Market Committee agreed to hold the target interest rate near zero so long as unemployment remains above 6.5 percent and inflation stays below 2.5 percent.
“Attempts to also put thresholds on the timing of asset purchases may be a bridge too far,” Bullard said today to the Wisconsin Bankers Association in Madison, Wisconsin.
Bullard said last week that unemployment could drop to about 7 percent by the end of this year, which may be enough improvement for the FOMC to halt the purchases, known as QE3 for the third round of quantitative easing.
He said his forecast would be a continuation of the unemployment decline seen since October 2009 when the rate hit 10 percent. The rate has since declined about 0.7 percentage point per year, he told reporters after the speech.
If that pace continues the current 7.8 percent jobless rate could decline to around 7 percent by the end of this year and “would get us to 6.5 percent sometime in the middle of 2014,” Bullard said.

Fed’s George Says Low Rates Risk Stoking Inflation Surge (Bloomberg)
Federal Reserve Bank of Kansas City President Esther George said the Fed’s record stimulus may fuel the risk of financial instability and a surge in inflation.
“A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the” Fed’s 2 percent inflation goal, George said today in a speech in Kansas City, Missouri.
Fed officials are debating when to end purchases of mortgage bonds and Treasury securities that are aimed at fueling economic growth and reducing 7.8 percent unemployment. Policy makers decided last month to hold the target interest rate near zero so long as unemployment remains above 6.5 percent and inflation stays below 2.5 percent. George holds a vote on the Federal Open Market Committee, which next meets Jan. 29-30.
Since becoming leader of the Kansas City Fed in October 2011, George has spoken mainly about financial regulation. Her predecessor, Thomas Hoenig, dissented from policy actions in 2010 and called for raising the benchmark interest rate from near zero percent.
Asset purchases by the Fed, now totaling $85 billion per month, will “almost certainly increase the risk of complicating the FOMC’s exit strategy” because bonds will need to eventually be sold, George said.
“Like others, I am concerned about the high rate of unemployment, but I recognize that monetary policy, by contributing to financial imbalances and instability, can just as easily aggravate unemployment as heal it,” George said to the Central Exchange, a group that promotes leadership development for women.

Consumer Comfort Falls as U.S. Payroll Tax Takes Hold: Economy (Bloomberg)
Consumer confidence waned last week and firings unexpectedly climbed, the first sign that higher U.S. payroll taxes will slow the economic expansion at the start of this year.
The Bloomberg Consumer Comfort Index fell to minus 34.4 in the seven days ended Jan. 6 from minus 31.8 the prior period, the biggest one-week drop since August. Jobless claims increased by 4,000 to 371,000 in the week ended Jan. 5, according to Labor Department figures.
Paychecks are shrinking after Congress last week let the tax that funds Social Security benefits revert to 6.2 percent from 4.2 percent. That means Americans will have to rely on increases in salaries to counter some of the lost income at the same time the job market shows little sign of further progress and the debate in Washington turns to federal spending cuts and the debt.
“Consumers are coming to the realization that their take- home pay is going to get smaller,” said Richard Yamarone, a senior economist at Bloomberg LP in New York. “That will translate into weaker spending. I expect the economy will spin its wheels for many months until the jobs picture, and associated incomes, improves.”
Shares climbed as optimism about China’s economy tempered a decline in technology stocks. The Standard & Poor’s 500 Index rose 0.3 percent to 1,465.98 at 12:58 p.m. in New York.

Wholesale Inventories in U.S. Increase 0.6% as Sales Surge (Bloomberg)
Inventories at U.S. wholesalers rose more than forecast in November as companies tried to keep up with a surge in demand.
The 0.6 percent increase in stockpiles followed a 0.3 percent rise in October that was less than initially estimated, the Commerce Department said today in Washington. The median forecast in a Bloomberg survey called for a 0.2 percent gain. Sales jumped 2.3 percent, the most since March 2011, as auto demand rebounded from a superstorm Sandy-related drop.
The acceleration in purchases left wholesalers with enough goods on hand to last 1.19 months at the current sales pace, the lowest since May. Stabilization in global growth and clarity on U.S. budget issues may help bolster demand and spur companies to step up orders.
“If you look at sales over the final two months of the year, this was a good thing,” Brian Jones, a senior U.S. economist at Societe Generale in New York, said before the report. “They were building inventories and importing cars in anticipation of solid year-end demand.”
The median forecast for wholesale inventories was based on a Bloomberg survey of 23 economists. Estimates ranged from a decrease of 0.4 percent to a 0.9 percent gain after an initially reported 0.6 percent advance in October.
Another report today showed initial jobless claims climbed to 371,000 last week from 367,000. A consistent decline in firings, along with a rise in payrolls, is needed to spur consumer spending, the biggest part of the economy.
Wholesalers’ stockpiles of durable goods, or those meant to last several years, increased 0.4 percent, led by autos, electrical equipment and machinery, today’s report showed. Demand for goods meant to last at least three years surged 2.7 percent, the biggest gain since December 2011.

China Data Suspected Says 75-Year-Old Theory: Cutting Research (Bloomberg)
A mathematical tool devised by an American physicist in the 1930s underscores doubts about the quality and reliability of Chinese economic data, according to research by Australia & New Zealand Banking Group Ltd. (ANZ)
The results are based on “Benford’s Law,” which holds that in any series of numbers, certain patterns will be found only if the statistics are naturally generated. The rule, created by former General Electric Co. (GE) engineer Frank Benford, suggests patterns for the first and second digits in a numeric series and can be used to detect phony data, Li-Gang Liu, ANZ’s chief economist for Greater China, and colleague Louis Lam said in a Jan. 8 report.
Benford’s work has already been adapted to show Greece should have been suspected of manipulating its data before the European debt crisis and that now-jailed financier Bernard Madoff was overstating investment returns.
The ANZ economists studied China’s annual nominal gross domestic product data from 1952 to 2011 to measure how frequently numbers from one to nine appeared as the first digit. While the 24 occurrences of “one” is higher than the 18 suggested by the rule, the economists said the statistics largely abide by what Benford’s Law allows. The same is true of industrial production data.
Suspicions emerged when the data was probed more deeply and reported in percentage terms, the ANZ report said, adding that the guilty party was often the second digit. An examination of the quarterly GDP growth rate from December 1991 to September 2012 shows zero occurred as the second digit 21 times, much higher than what Benford would calculate and suggesting a rounding-up to achieve a bigger leading digit. One through four also appeared more regularly than the law reckons, while seven through nine featured less.
Inflation reported on a percentage basis also failed to fit the law.
“Non-conformity to the Benford’s law does not always indicate data manipulation, but nevertheless it raises doubts about the quality of Chinese data,” the authors said. “Our statistical analysis seems to have confirmed the long-rooted suspicion on quality and reliability of Chinese data.”

Japan Current Account Slides Into Deficit Ahead of Stimulus (Bloomberg)
Japan posted a larger-than-expected current account deficit as exports fell, underscoring the challenges facing Prime Minister Shinzo Abe as he prepares a stimulus package to pull the economy out of a recession.
The shortfall in the widest measure of the nation’s trade in November was 222.4 billion yen ($2.5 billion), the Ministry of Finance said in Tokyo today. The median estimate of 19 economists surveyed by Bloomberg News was for a 17.1 billion yen deficit.
The government will announce economic stimulus measures today, with Nomura Securities Co. estimating that the spending will increase gross domestic product by 0.8 percentage point in the year starting in April. Exporters may receive a boost this year from a yen that has fallen around 10 percent against the dollar since mid-November.
“The trade numbers are weak now because of the global slowdown last year,” Yoshimasa Maruyama, chief economist at Itochu Corp. (8001) in Tokyo, said before the report. “The Abe administration may keep on pushing for a weaker yen.”
The currency slid through 89 per dollar after the data, before trading at 89.27 as of 8:54 a.m. in Tokyo, the weakest since June 2010.
The current account is the sum of the balance of trade, earnings on investments and cash transfers. November is traditionally a weak month for Japan’s account because smaller dividend payments reduce income from overseas investments, according to Maruyama. Today’s deficit is the first since at least 1985 in months other than January, when seasonal trade factors drag down the account.

BOJ Said to Consider Boosting Inflation Forecast After Yen Falls (Bloomberg)
The Bank of Japan (8301) may increase its fiscal 2014 inflation forecast at this month’s policy meeting as stimulus measures and a weaker yen boost growth prospects, according to people familiar with officials’ discussions.
The central bank may raise an October projection for an 0.8 percent increase in consumer prices excluding fresh food, the people said on condition of anonymity because the discussions are private. They didn’t specify a new number. The current forecast was made before Prime Minister Shinzo Abe took office last month, pledging aggressive measures to counter deflation.
The BOJ is set to adopt the 2 percent inflation target advocated by Abe, doubling its existing goal of 1 percent, without setting a deadline for achieving it, the people said. Nomura Holdings Inc. economist Tomo Kinoshita said yesterday that Japan’s struggle to exit deflation means the higher objective may not be attained until after 2015.
“Two percent is a very ambitious target,” Kinoshita said in Tokyo. “The government and Bank of Japan have tried various means of getting out of deflation, but they have yet to produce a result.”
Japan’s consumer prices excluding fresh food, a benchmark monitored by the central bank, fell 0.1 percent in November from a year earlier. The economy has been gripped by deflation since the late 1990s, caused by burst stock and land-price bubbles, and the ensuing hobbling of the financial system by non- performing loans.

Lew-for-Geithner Switch Ends Era of Tight Fed-Treasury Ties (Bloomberg)
Timothy F. Geithner’s replacement by Jack Lew as Treasury secretary will end a period of unusually strong ties between the department and the Federal Reserve. For the Fed, the result may be less insulation from critics, yet greater influence in financial market regulation.
Geithner worked closely with Fed Chairman Ben S. Bernanke in fighting the financial crisis and cleaning up its aftermath, first as head of the Federal Reserve Bank of New York and then as Treasury secretary. Going through the “searing experience of the panic together” created a bond between the two that “you get from that kind of combat,” Geithner said in a 2010 interview
“You’ve never had a secretary with the type of credentials” that Geithner had, including his relationships and knowledge as a former Fed insider, said Edwin M. Truman, who has worked at both the central bank and under Geithner at the Treasury. “The only thing that comes close” was when Paul Volcker headed the Fed after being a senior Treasury official.
President Barack Obama said he will nominate Lew, his White House chief of staff, to succeed Geithner at the Treasury, calling him “a master of policy.” Obama said Geithner will “go down as one of our finest secretaries of the Treasury.”

Draghi Hails ‘Positive Contagion’ as Euro Markets Stabilize (Bloomberg)
European Central Bank President Mario Draghi said the euro-area economy will slowly return to health in 2013 as the region’s bond markets stabilize after three years of turmoil.
“We have signs that fragmentation is being gradually repaired,” Draghi told reporters in Frankfurt today after the ECB kept its benchmark interest rate at 0.75 percent. “We spoke a lot about contagion when things go poorly but I believe there is a positive contagion when things go well. And I think that’s also what is in play now. There is a positive contagion.”
Draghi chaired the Governing Council’s first decision of the year as the crisis that has rampaged through the economy since early 2010 shows signs of waning. The ECB’s pledge to buy as many government bonds as needed, plus “significant” political progress on melding the euro’s 17 economies together, has diminished concerns the currency bloc would break up.
“A gradual recovery should start” later this year as ECB measures work their way through the economy, Draghi said.
Spain’s 10-year borrowing costs, which hit a euro-era record of 7.75 percent in July, today fell below 5 percent for the first time since March after a bond sale. The euro climbed the most in four months against the dollar, rising 1.2 percent to $1.3219. The currency advanced to the highest since July 2011 against the yen.