The yen gained after Japan's chief financial regulator Yoshimi Watanabe said the government is watching banks' half-year earnings for any losses related to the U.S. subprime mortgage crisis.
Japan's yen was the best performer of the 16 most-active currencies in the past month as a surge in the cost of credit caused investors will sell higher-yielding assets paid for with money borrowed in Japan.
``Watanabe's comments seemed to have made investors risk- averse, spurring yen-buying,'' said Akifumi Uchida, deputy general manager of the marketing unit at Sumitomo Trust & Banking Co. in Tokyo.
The yen rose to 115.84 against the dollar as of 2:15 p.m. in Tokyo from 116.33 yesterday in New York. It also climbed to 157.36 per euro from 158.26. It may advance to yesterday's high of 115.34 versus the dollar and 156.54 per euro, Uchida said.
Japan's currency snapped two days of losses after Watanabe, who was named chief financial regulator last week, told reporters ``I'll be watching carefully when banks report for a clearer view of losses related to the subprime problem.''
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