The dollar fell against the yen after Treasury Secretary Timothy Geithner pledged government financing that may reach $2 trillion to spur lending and address toxic assets choking banks’ balance sheets. The yen gained versus most of the major currencies after stocks dropped as Geithner announced the financial recovery plan, increasing demand for a haven. Japan’s currency lost 3.1 percent versus the euro last week in its biggest decline since October on expectations the U.S. plan would limit losses at financial firms. “The numbers involved look huge, but there are still questions about how this is all going to work,” said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto. “The market expected an out-of-the-box solution, whereas the details of some of this still seem up in the air.” Japan’s currency advanced 1.1 percent to 90.43 per dollar at 11:40 a.m. in New York, from 91.46 yesterday. The yen strengthened 1.1 percent to 117.64 per euro from 118.94. The euro lost 0.2 percent to $1.2983 from $1.3003. The Treasury is creating a Public-Private Investment fund, with an initial capacity of $500 billion that could grow to $1 trillion, to provide financing for private investors to buy distressed securities, Geithner said in a speech in Washington. The department will also work with the Federal Reserve to finance as much a $1 trillion in new consumer and business loans. The new Consumer and Business Lending Initiative is modeled on an earlier program to support new credit. President Barack Obama is demanding an economic stimulus bill on his desk before Congress leaves for the Feb. 16 Presidents’ Day holiday. The Senate voted 61 to 36 yesterday to end debate on an $838 billion measure and will vote today on whether to approve it.

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