The yen fell against all of the other major currencies on speculation additional U.S. government steps to help banks dispose of toxic assets will spur demand for higher-yielding assets. The dollar declined against the currencies of six major U.S. trading partners after last week’s biggest drop since the 1985 Plaza Accord as the U.S. Treasury announced plans to finance as much as $1 trillion in purchases of distressed assets by private investors. The Australian and New Zealand dollars advanced for a 10th day versus the greenback and gained versus the yen as stocks rallied. “It looks like it’s a story that speaks more to a recovery in risk appetite,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York. “It plays more to the strengths of the Aussie and the kiwi.” The yen depreciated 0.6 percent to 131.11 per euro at 9:15 a.m. in New York, from 130.29 on March 20. It touched 132.26, the weakest level since Oct. 21. Japan’s currency declined 0.8 percent to 96.71 per dollar from 95.94. The dollar traded at $1.3556 per euro, compared with $1.3582. The U.S. currency reached $1.3738 on March 19, the weakest level since Jan. 9. The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, fell 0.1 percent to 83.80. It dropped 4.1 percent last week, the biggest decrease since September 1985, when the U.S., U.K., France, Japan and West Germany agreed at New York’s Plaza Hotel to coordinate the devaluation of the dollar against the yen and deutsche mark. Treasury Statement The Treasury said today in a statement in Washington that the Public-Private Investment Program will use $75 billion to $100 billion from the $700 billion Troubled Asset Relief Program enacted last year, giving the government “purchasing power” of $500 billion. The program may double “over time,” the Treasury said. The Federal Reserve unexpectedly announced on March 18 it will buy as much as $300 billion of Treasuries and increase purchases of agency mortgage-backed securities to lower consumer borrowing costs. Australia’s dollar rose 1.8 percent to 69.93 U.S. cents, and New Zealand’s dollar advanced 1.6 percent to 56.78 U.S. cents. The Fed’s target range of zero to 0.25 percent for overnight lending between banks compares with 3.25 percent in Australia and 3 percent in New Zealand. “We could well see the dollar push lower as risk appetite improves a bit,” said Geoffrey Yu, a London-based strategist at UBS AG, the world’s second-largest foreign-exchange trader. Yen’s Decline The New Zealand and Australian dollars posted the biggest gains versus the yen among the most actively traded currencies today as the Nikkei 225 Stock Average strengthened 3.4 percent, the MSCI World Index climbed 1.3 percent and Standard & Poor’s 500 Index futures rose 2.9 percent. The kiwi increased 2.4 percent to 54.92 yen, while the Aussie gained 2.2 percent to 67.44 yen. The dollar erased its decline versus the euro as U.S. stock-index futures reduced their gains. The yen also weakened against the euro after a government survey showed confidence among Japan’s manufacturers fell the most on record this quarter, diminishing the currency’s allure as a shelter from the financial crisis. “Japan’s fundamentals including its economy are still deteriorating, casting doubt over the appeal of its currency,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. Sentiment in Japan The Cabinet Office and Finance Ministry said today sentiment among large manufacturers was minus 66 points in the first quarter compared with minus 44.5 points three months earlier. A negative number means pessimists outnumber optimists. The government began compiling the report in 2004. Demand for the euro also increased after European Central Bank President Jean-Claude Trichet said in an interview with the Wall Street Journal that zero interest rates have “drawbacks” and would not be “appropriate.” “The ECB is most reluctant” to lower its 1.5 percent target lending rate, said Yuji Saito, Tokyo-based head of the foreign-exchange group at Societe Generale SA, France’s third- largest bank. JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. are advising investors to buy euros. Traders are snapping up currencies of nations where central bankers are resisting calls to purchase debt securities as a way of lowering interest rates and bolstering financial systems. Such currencies are becoming scarce after the Fed joined the Bank of England, Bank of Japan and Swiss National Bank in quantitative easing. “The dollar is a sell near-term versus those currencies where quantitative easing is off the table,” said John Normand, head of currency strategy at JPMorgan in London. “The top on euro-dollar will come when the ECB looks likely to join the quantitative-easing crowd. For now, it’s content to stay on the sidelines.”

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