The yen may be set to end its nine weeks of decline against the euro amid strengthened borrowing in Japan as global stocks slump.

Earlier today, the Japanese currency traded at 161.70 per euro and 119.89 per dollar, having risen against 13 of the 16 most traded currencies over the course of the week.

Chief currency strategist at Barclays Capital, Toru Umemoto, told Bloomberg: "The yen may gain on the back of the unwinding of carry trades. With investors beginning to take a risk-averse attitude, the yen may face some upward momentum."

Meanwhile, the euro fell after European Central Bank President Jean-Claude Trichet failed to hint at long-term policy plans.

The bank moved to hold interest rates at 3.75 per cent yesterday and analysts are broadly forecasting a rate rise in June after the euro fell in value to $1.3462.

Mr Umemoto predicted that the yen may rise to 118 per dollar in the coming days.