UPDTAES ON AUG 22 008

AUG 22 FRIDAY

Yen Falls Against Dollar as Japan Investors Seek Higher Yields .

The yen fell from a two-week high against the dollar on

speculation Japanese investors took advantage of the

currency's advance to buy higher-yielding assets abroad.

The yen fell to 108.96 per dollar at 1:04 p.m. in Tokyo from

108.43 in New York yesterday. It slid to 162.01 a euro from

161.57. The dollar has fallen 1.4 percent against the yen

this week, the biggest decline since May 9, and yesterday

reached 108.14, the weakest since Aug. 5. It rose to

$1.4869 per euro from $1.4899, paring this week's

drop to 1.2 percent.

The U.S. currency was set for its first weekly loss versus

the euro since July 11 on speculation a deepening housing

recession and a rebound in oil prices will prolong the

nation's economic slump. Bernanke will speak on

financial stability at the Federal Reserve Bank of

Kansas City's annual symposium in Jackson Hole,

Wyoming at 8 a.m. local time.

Crude oil prices surged 4.9 percent yesterday to $121.18

a barrel in New York, the biggest increase since June 6.

The euro- dollar exchange rate and oil had a correlation

of 0.9 in the past year, according to Bloomberg

calculations based on their value changes.

The dollar has gained more than 7 percent versus the euro

since touching an all-time low of $1.6038 on July 15 and

appreciated 0.6 percent against the yen this month as

reports showed the European and Japanese economies

shrank in the second quarter.

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