Oct 14 Tuesday

Yen Falls Against Euro as Bank Rescue Supports Carry Trades .

The yen fell for a second day against the euro as increased

support for banks by European and the U.S. governments

encouraged investors to add to holdings of high-yielding

assets funded in the Japanese currency.

The yen also slid against the Australian and New Zealand

dollars, two favorites of so-called carry trades, as people

briefed on the U.S. plan said the Treasury will buy stakes

in banks including Citigroup Inc. and JPMorgan Chase &

Co. The euro and the pound rose against the dollar after

European countries committed $1.8 trillion to guarantee

bank loans.

Losses in the dollar accelerated against the euro after the

Fed said yesterday the European Central Bank, the Bank

of England and the Swiss National Bank will offer financial

institutions unlimited funds in the U.S. currency.

Currency strategists and investors say Europe's actions may

not prevent the region's economy from slowing. Morgan Stanley

predicts a decline in the euro to $1.25 by 2009, from $1.3581

yesterday and $1.60 in July, and strategists at BNP Paribas

see weakness after ``some support in the near term.''