The euro rose to a four-year high against the yen as annual inflation in Germany accelerated in November more than economists forecast, damping bets the European Central Bank will further loosen monetary policy.
German government bonds fell as minutes of the Federal Reserve’s October policy meeting showed the U.S. central bank may taper its $85 billion in monthly asset purchases “in coming months” if the economy improves.
Germany’s notes fell, with two-year yields rising the most in 11 weeks, as the nation’s business confidence climbed to the highest level in more than a year in November, damping demand for the safest assets.
European government bonds fell as minutes of the Federal Reserve’s October policy meeting showed the central bank may taper its $85 billion in monthly asset purchases “in coming months” if the U.S. economy improves.
German government bonds advanced, with two-year yields falling to the lowest in a week, after the European Central Bank was said to weigh a negative deposit rate to bolster growth and prevent deflation.
German bonds declined, snapping an advance that pushed 10-year yields to the lowest in almost two weeks, as a report showed investor confidence in Europe’s largest economy increased to a four-year high this month.
Italy’s 10-year yield approached a five-month low as Prime Minister Enrico Letta said turmoil in former Premier Silvio Berlusconi’s PDL party will boost government stability and the nation sold five-year notes in an exchange auction.