Yen falls on corporate tax cut report

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Yen falls on corporate tax cut report

The yen declined at least 0.6 percent versus all of its major counterparts after a news report saying the Japanese government is weighing a corporate-tax cut boosted stocks and damped demand for safer assets.

The yen fell for a second day against the dollar after a report showed Japanese machinery orders fell in June, boosting the case for further monetary stimulus.

The Bloomberg U.S. Dollar Index rose before data analysts said will show U.S. retail sales climbed for a fourth month, boosting the case for the Federal Reserve to scale back asset purchases.

The euro gained versus most of its 16 major peers before data forecast to show German economic confidence at a five-month high.

The yen depreciated 0.9 percent to 97.79 per dollar at 8:52 a.m. London time after reaching 97.84, the weakest since Aug. 6. Japan’s currency slid 0.9 percent to 129.98 per euro. The shared currency was little changed at $1.3291.

The Bloomberg U.S. Dollar Index rose for a second day, adding 0.3 percent to 1,023.33 after gaining 0.4 percent yesterday, its first advance in more than a week.

Prime Minister Shinzo Abe is mulling a tax cut for companies, the Nikkei newspaper reported, citing unidentified government officials. Machinery orders in Japan declined 2.7 percent in June from the previous month, when they climbed 10.5 percent, data released by the Cabinet Office showed.

The U.S. Commerce Department will say retail sales climbed 0.3 percent last month after a 0.4 percent advance in June, according to the median forecast of economists surveyed by Bloomberg News.

The ZEW Center for European Economic Research in Mannheim is forecast to say its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 39.9 this month from 36.3 in July, according to economists polled by Bloomberg. If confirmed, that would be the highest since March.

The yen has declined 8.8 percent this year, the worst performer after the Australian dollar among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro has advanced 5.1 percent, the biggest gainer. The U.S. dollar has climbed 4.3 percent. Bloomberg

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