NEW YORK (Bloomberg) — The yen declined against the dollar and euro this week after a rebound in global stock markets encouraged investors to sell the Japanese currency to buy higher-yielding assets overseas.Japan’s yen fell against 15 of 16 most-active currencies as shares recouped losses from a rout started on February 27, giving investors confidence to return to the so-called carry trade. Japan has the lowest interest rate among industrialised nations. The European Central Bank raised borrowing costs on March 8, widening its interest-rate advantage versus Japan.

“The carry trade is back,” said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. “The yen is under pressure.”

The Japanese currency lost 1.3 percent this week, declining to 118.33 per dollar yesterday from 116.80 on March 2. The yen also weakened 0.7 percent to 155.19 per euro from 154.10 a week ago.

The yen also lost 2.8 percent against the Brazilian real, 2.1 percent versus the South African rand and 1.7 percent against the New Zealand dollar this week.

The Swiss franc, another funding currency for the carry trade, snapped a five-week winning streak against the dollar.

“The yen carry trade is alive and well in the sense that many have used very inexpensive borrowing from Japan to invest in very high-yielding assets such as emerging-market equities,” said Michael Woolfolk, senior currency strategist at the Bank of New York.

Japan’s interest rate is 0.5 percent, while Switzerland’s is 2 percent, the second-lowest among developed countries.

The Reserve Bank of New Zealand lifted borrowing costs to a record 7.5 percent on March 8. The ECB raised its benchmark interest rate to 3.75 percent. The Bank of England kept its rate at 5.25 percent on the same day.

The dollar gained 0.6 percent versus the European currency this week, advancing to $1.3116 per euro from $1.3192 on March 2. The European currency had gained against its U.S. counterpart for five weeks.

The US currency erased its daily decline versus the euro yesterday after a government report showed US employers hired more workers than economists forecast in February, reducing expectations the Federal Reserve will cut its benchmark interest rate from 5.25 percent later this year.

US employers hired 97,000 workers last month, after a revised gain of 146,000 in January, the Labour Department said in Washington. It compared with a median forecast of 95,000 in a Bloomberg survey.

The unemployment rate in the world’s largest economy declined to 4.5 percent in February from 4.6 percent a month earlier, according to the report. The median forecast in the survey called for the unemployment rate to be unchanged.

The yen’s decline followed a 3.7 percent gain against the dollar a week earlier, when slumps in global equity markets and emerging-market assets spurred investors to exit the carry trade. Stock indexes in Europe and the US rebounded this week.

Volatility on one-month yen options against the dollar declined to 8.28 percent yesterday, the lowest since February 26, from 8.48 percent on March 2. Lower volatility may encourage carry trades as it exposes the bets to less currency risk.