The Japanese yen weakened against major currencies as Standard & Poor's maintained top credit ratings for MBIA Inc. and Ambac Financial Group Inc., encouraging traders to buy higher-yielding assets. U.S.

S&P said in a statement that MBIA remains on negative outlook, meaning any ratings move may be lower, though nothing is imminent. Ambac, which ranks second to MBIA among bond insurers, is still being reviewed for a possible downgrade. U.S. stocks extended gains on the S&P announcement, pushing the S&P 500 Index up 1.4%. The Dow Jones industrial average was up 189.20 points or 1.53% to end at 12570.22. The Nasdaq Composite Index was up 24.13 points or 1.05% to close at 2327.48.

The greenback rose from 107.18 to 108.23 versus the Japanese yen. Euro, aussie and sterling strengthened against the Japanese currency from 158.92 to 160.43, 98.96 to 100.21 and from 210.54 to 212.86 respectively. The British pound rebounded from 1.9615 to 1.9701 on Monday. The single currency was little changed against the dollar and traded inside 1.4794-1.4845 range on Monday, after hitting a three-week peak of at 1.4863 on last Friday.

On the data front, a report showed declines in the sales of existing homes in the U.S. slowed last month, signaling the housing slump may be closer to a bottom. U.S. existing home sales fell by 0.4% (forecast was –1.8%) to an annual rate of 4.89 million, from a revised 4.91 million in December.

The Australian dollar rose from 0.9217 to 0.9274 on speculation that the Reserve Bank of Australia will raise rates at least two more times by May. The New Zealand dollar rose to a record high of 0.8121 versus the U.S. currency, the highest since the currency started to trade freely in 1985, as the UBS Bloomberg Constant Maturity Commodity Index approached a record.

Tuesday will see the release of Japan’s CSPI, German GDP and Ifo index, U.K. CBI distribution trade, U.S. PPI, consumer confidence and house price index.