American focus: the yen and dollar weakened

The yen and dollar weakened, reversing yesterday’s gains, as a recovery in gold and U.S. stocks sapped demand for the safest assets.

Japan’s currency dropped versus all of its 16 most-traded peers as investors bet its rally yesterday when investors sought haven investments was excessive.

Stocks rose after Commerce Department data showed new-home construction in the U.S. jumped more than forecast in March. Housing starts in the U.S. increased 7 percent to a 1.04 million annual rate, the most since June 2008. Economists in a Bloomberg survey forecast 930,000.

The greenback remained lower versus most major peers as figures from the Federal Reserve showed output at U.S. factories fell 0.1 percent after a 0.9 percent increase in February that was larger than first reported. A survey forecast a 0.1 percent rise. Total industrial production rose 0.4 percent.

The euro climbed to a seven- week high versus the greenback. The U.S. consumer-price index unexpectedly declined 0.2 percent last month after a 0.7 percent jump in February, the Labor Department said in Washington. The forecast in a Bloomberg survey was for no change. The core measure, which excludes volatile food and energy costs, rose 0.1 percent, less than forecast. For the 12 months that ended in March, consumer prices increased 1.5 percent, the smallest gain since July, compared with a 2 percent year-over-year gain reported in February.

Sterling fell to the weakest in a month against the euro after a report showed consumer-price inflation stayed above the Bank of England’s target at the same time as growth stagnates. The pound weakened 0.7 percent to 85.88 pence per euro after touching 86.02, the least since March 15. The currency appreciated 0.4 percent to $1.5351.