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Yen Near Weakest Level Since 2008; Pound Slides on Poll Concern

The yen was near the lowest in almost six years versus the dollar as Japanese reports showing a slump in business spending and a shrinking current-account surplus added to signs the economy is losing momentum.

The pound slid at least 0.4 percent versus all 16 major counterparts after a poll showed the campaign for Scottish independence in front for the first time, stoking concern the 307-year union forming the U.K. will splinter after the Sept. 18 vote. Australia’s dollar snapped a three-day gain after a Chinese report showed imports unexpectedly declined.

“The collapse of Japan’s previously large current-account surplus is the main medium-term driver behind a weaker yen,” said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. “The larger fall in business spending is particularly disappointing.”

The yen was little changed at 105.13 per dollar at 7:19 a.m. in London after depreciating to 105.71 on Sept. 5, the weakest level since October 2008. Japan’s currency traded at 135.96 per euro from 136.11. The dollar was at $1.2935 per euro from $1.2951.

Japan’s Cabinet Office said annualized gross domestic product shrank 7.1 percent in the second quarter, compared with the forecast of 7 percent in a Bloomberg survey. Business spending slid 5.1 percent and the adjusted current-account balance narrowed to 99.3 billion yen ($945 million) in July from 125.6 billion yen the previous month.

Yen’s Decline

The yen has declined 1.34 percent in the past month, according to Bloomberg Correlation-Weighted Indexes that track 10 developed nation currencies. The euro dropped 2 percent, while the dollar strengthened 2 percent.

If Japan’s economy continues to be weak in the July-September quarter, “that would raise expectations for additional easing by the Bank of Japan and curb demand for the yen,” saidDaisaku Ueno, the Tokyo-based chief currency strategist at Mitsubishi UFJ Morgan Stanley Securities Co. “While the gain in U.S. nonfarm payrolls was below the market’s forecast, one month’s data isn’t enough to deter the Fed from normalizing policy.”

U.S. Labor Department data last week showed employers added 142,000 workers in August, the least this year. That was below the lowest estimate in a Bloomberg survey of economists.

The Bloomberg Dollar Spot Index, which tracks the greenback against a basket of 10 leading global currencies, rose 0.2 percent to 1,039.74 after reaching 1,041.58 on Sept. 5, the highest since July 2013 .

Pound Plunges

Sterling slid to the weakest against the dollar since November after a poll by YouGov Plc showed the Scottish independence campaign gained a lead for the first time this year with the vote due on Sept. 18.

A “Yes” vote would raise the prospect of a more cautious approach from the Bank of England, which this month kept its key interest rate at a record-low after persistent weakness in inflation and wage growth reinforced the case for maintaining emergency stimulus.

The pound declined 0.9 percent to $1.6183 after falling to $1.6165, the weakest since Nov. 26. It tumbled 1.6 percent last week, the most since the period ended July 5, 2013.

“The pound is being sold on a knee-jerk reaction after the opinion polls,” said Kumiko Ishikawa, a currency analyst at Gaitame.com Research Institute Ltd. in Tokyo. “If Scotland were to leave the U.K., that would add confusion to the union’s economy and raise the bar for BOE’s policy tightening.”

Australia’s dollar fell 0.1 percent to 93.65 U.S. cents.

China’s imports unexpectedly dropped 2.4 percent in August from a year earlier, leaving a trade surplus of $49.8 billion, data from the Beijing-based customs administration showed today.

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