The yen weakened, falling toward 100 per dollar for the firsttime since April 2009, after Bank of Japan Governor Haruhiko Kurodasaid he was emboldened to press ahead with a campaign to defeatdeflation.

Japan's currency dropped against 14 of its 16 major counterpartsafter the Group of 20 offered no opposition to the central bank'smonetary stimulus policies at a meeting last week in Washington.Sweden's krona strengthened after Riksbank Deputy Governor LarsE.O. Svensson said he will leave the central bank after failing toget support for deeper interest-rate cuts. The euro rose for athird day versus the yen after Giorgio Napolitano was re-elected toa second term as Italian president.

“The G-20 gave a green light to sell the yen,” Kiran Kowshik, acurrency strategist at BNP Paribas SA in London, said in atelephone interview. “The focus now is on what a lot of theJapanese investor base is doing in the new fiscal year.”

The yen fell 0.2 percent to 99.73 per dollar at 8:23 a.m. in NewYork after depreciating to 99.90, the weakest since it declined toa four-year low of 99.95 on April 11. Japan's currency dropped 0.1percent to 130.02 per euro. The euro was little changed at$1.3036.

Nippon Life Insurance Co., Japan's largest life insurer, said itmay buy more foreign debt and cut holdings of long-term domesticsecurities if yields in Japan stay low. Japanese investors were netsellers of foreign bonds during the week ended April 12 accordingto figures based on reports from designated major investorsreleased by the Ministry of Finance last week.

“These Japanese outflows will begin,” Kowshik said. “Clearlyit's not been seen in the weekly portfolio flow data, but we thinkthat is something that will come through.”

G-20 finance chiefs and central bankers meeting on April 19praised the measures taken by the BOJ this month aimed atincreasing inflation to 2 percent within two years. They signaledJapan's focus on supporting domestic demand was strong enough toallow them to ignore the side effects on their own economies of asliding yen.

“Winning international understanding gives me more confidence toconduct monetary policy appropriately,” Kuroda told reporters afterthe gathering. “We will continue our qualitative and quantitativeeasing for the next two years.”

The BOJ is scheduled to deliver its next policy statement inTokyo on April 26 after announcing larger-than-expected stimulusmeasures at its previous gathering on April 4.

The yen has dropped 5.5 percent against the dollar in Aprilafter falling for the previous six months, the longest losingstreak since 2001.

“The BOJ has definitely altered the psychology of the market”toward the yen, said Stephen Gallo, European head of currencystrategy at Bank of Montreal in London. “The safe- haven attributesof the yen have been fundamentally and drastically altered for theforeseeable future.”

Futures traders increased bets the yen will weaken versus thegreenback last week, according to data from the Commodity FuturesTrading Commission. The difference in the number of wagers by hedgefunds and other large speculators on a decline compared with thoseon a gain — so-called net shorts — was 93,411 on April 16, comparedwith 77,697 a week earlier.

Krona Strengthens

The krona appreciated against all 16 of its major counterpartsafter Svensson said he would step down when his term expires nextmonth.

“I haven't managed to get support for a monetary policy that Iconsider would lead to better target fulfillment,” he said in astatement explaining his decision. Svensson has advocated biggerrate cuts than the majority of the central bank's board, arguinghis colleagues' policies are costing jobs.

Svennson's departure “sees the Riksbank lose its most dovishmember and therefore reduces the probably of a cut later thisyear,” Matthew Slade and Geoff Kendrick, strategists at NomuraInternational Plc in London, wrote in a note to clients. Theyrecommended investors bet the krona will strengthen to 8.25 pereuro.

The krona gained 0.4 percent to 8.5114 per euro and rose 0.3percent to 6.5238 per dollar.

The euro rose toward the highest since January 2010 against theyen as Napolitano was re-elected president on April 20 after thecountry's divided Parliament had failed to agree on a candidate inthe first five rounds of voting.

Napolitano will now take the lead in trying to end the politicalgridlock that's left the country without a new government eightweeks after inconclusive elections.

“As long as we can avoid the inevitability of elections, thisweekend's development is positive in that regard, then, thatprovides a little bit of support under the euro,” said Ray Attrill,global co-head of currency strategy at National Australia Bank Ltd.in Sydney.

South Korea's won dropped the most in two weeks against thedollar on speculation policy makers will favor depreciation tosupport South Korean exporters as the yen's slide to a four-yearlow makes Japanese rivals more competitive.

“The G-20 meeting raised concerns that there's room for the yento weaken further, which may hurt South Korea's exportcompetitiveness,” said Jeon Seung Ji, an analyst at Samsung FuturesInc. in Seoul. “Speculation that authorities may step in to weakenthe won to protect exporters is pushing the currency lower.”

The won fell 0.3 percent to close at 1,119.05 per dollar afterdropping as much as 0.7 percent, most since April 8.

Bloomberg News

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