American focus: the dollar rose to a nine-month high against the yen

The dollar rose to a nine-month high against the yen before U.S. reports next week forecast to show growth in the world’s biggest economy is gathering pace while deflation persists in Japan. The dollar gained against most major currencies after Federal Reserve Chairman Ben S. Bernanke cast doubt about a third round of asset purchases.

The yen dropped against most of its major counterparts as Japan’s consumer prices decreased, fanning speculation the central bank will expand monetary easing.

The euro declined a third day since the European Central Bank’s bank-loan program as a German report showed retail sales unexpectedly fell. The euro weakened versus the dollar after Germany’s statistics bureau said retail sales adjusted for inflation and seasonal swings fell 1.6 percent in January. Economists forecast a gain of 0.5 percent, a Bloomberg News survey showed. Euro-area retail sales dropped for a third month in January, the European Union’s statistics office will say on March 5, another Bloomberg survey showed. The ECB will keep its benchmark interest rate at a record low 1 percent on March 8, according to a separate survey. European leaders agreed this week to provide capital faster for the planned permanent bailout fund in a concession to international pressure to strengthen the currency bloc’s defenses against the debt crisis.

Sterling rose for a sixth day against the euro, the longest stretch since November 2010, as an industry report showed an index for U.K. construction rose in February to an 11-month high, boosting speculation the nation will avoid a recession. The pound gained 0.2 percent to 83.28 pence per euro after reaching 83.14, the strongest level since Feb. 20.