SEPT 30 TUESDAY

Yen Rises Against Euro as U.S. Lawmakers Vote Down Rescue Plan .

The yen rose to its highest in almost two weeks against the

euro on concern U.S. lawmakers' rejection of a $700

billion bank rescue plan will cause credit losses to mount,

curbing demand for higher-yielding assets.

The yen rose to 150.23 per euro at 7:28 a.m. in London from

150.38 yen late yesterday in New York. It earlier reached

148.84, the strongest since Sept. 17. The yen reached

103.54 per dollar, the highest since Sept. 16, before

slipping to 104.35 yen from 104.18 yen. The U.S. currency

may stay between 100 yen and 105 yen this year,

Umemoto said. The euro fell to $1.4395 from $1.4434.

The euro approached a one-week low against the dollar on

speculation other European banks may need a rescue after

Dexia SA and Fortis, the largest Belgian financial-services

company, both received government-sponsored lifelines

this week.

The pound fell after the U.K. Treasury seized Bradford &

Bingley Plc yesterday, the nation's biggest lender to landlords.

The Chicago Board Options Exchange Volatility Index rose

34 percent yesterday to 46.72, eclipsing the previous

closing record of 45.74 in October 1998, when the collapse

of hedge fund Long-Term Capital Management

destabilized markets.

Futures on the Chicago Board of Trade indicated yesterday a

66 percent chance that the Fed would reduce its 2 percent

target lending rate by a half-percentage point by its Oct.

29 meeting, compared with zero odds a week ago. There

was a 34 percent chance policy makers would cut by a

quarter-point.

Declines in the dollar may be limited by speculation investors

will buy the currency as they can't secure dollar funding in

short-term money markets.

The Federal Reserve said yesterday it increased existing

currency swaps with foreign central banks by $330 billion

to $620 billion to make more dollars available worldwide

as losses on mortgage-related securities prompt financial

institutions to hoard cash.