The yen and dollar rose against all of the major currencies as a U.S. government official said bankruptcy may be the best option for General Motors Corp. and Chrysler LLC, spurring investors to take refuge. Japan’s currency climbed to the highest level versus the euro in two weeks as global stocks fell on concern the global recession will lead to further losses in the financial industry. U.S. Treasury Secretary Timothy Geithner said yesterday some financial institutions will need “large amounts” of aid. “We’re still looking for the dollar to do better and the euro to sell off,” said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut. “Everything is back again with GM and Chrysler.” The yen advanced 2.2 percent to 127.20 per euro at 9:58 a.m. in New York, from 130.04 on March 27. It reached 126.42, the strongest level since March 16. The two-day gain of 4.5 percent was the biggest since Jan. 12. The yen appreciated 1.1 percent to 96.80 per dollar from 97.86. The dollar strengthened 1.1 percent to $1.3141 per euro from $1.3287. The dollar was headed for a 6 percent gain against the euro in the first three months of the year, its fourth quarterly increase and the longest stretch of advance since December 2005. The greenback climbed 6.9 percent versus the yen, the second- best performance among major currencies tracked by Bloomberg. Norway’s krone was the best performer versus the yen and the only gainer versus the U.S. currency among major currencies on higher crude oil prices, rising 9.2 percent to 14.27 yen and 2.2 percent to 6.8075 versus the dollar. ECB’s Outlook The euro fell against the dollar for a third day on speculation the European Central Bank will cut the main refinancing rate on April 2 by a half-percentage point to 1 percent, the lowest since the currency’s introduction in 1999. The shared currency also dropped on speculation policy makers may be forced to adopt unconventional monetary policy measures, such as printing money, as interest rates approach zero. Both the Federal Reserve and the Bank of England are buying assets such as corporate and government debt to boost the economy, a policy known as quantitative easing. The “key obstacle” to euro gains “is that the ECB too will adopt some form of quantitative easing,” said John Normand, head of global currency strategy in London at JPMorgan Chase & Co. “This Thursday’s ECB meeting will prove a key test given that every major central bank which met this month surprised the market with the scope and scale of quantitative easing.” G-20 Meeting Leaders from the Group of 20 emerging and developed nations will meet in London on the day of the ECB’s decision to try to forge a common response to the global financial crisis. The Dollar Index rose today after an official in President Barack Obama’s administration who declined to be identified said GM and Chrysler must overhaul their recovery plans with deeper concessions to justify further taxpayer cash, increasing demand for the world’s main reserve currency. The administration ousted GM Chief Executive Officer Rick Wagoner, while Chrysler CEO Robert Nardelli was allowed to keep his position. The gauge of the greenback, which the ICE uses to track the currency against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, climbed 0.6 percent to 85.587 after reaching 85.81, the highest level since March 18. The MSCI World Index slid 1.5 percent as stock markets in Europe declined. The Standard & Poor’s 500 Index dropped 2.9 percent. The yen is likely to fall to its lowest level against the dollar in more than five months as Japan’s recession deepens and the appeal of the currency wanes, Goldman Sachs Group Inc. said, reiterating a forecast it made on March 11. Japan’s Outlook The yen will probably weaken because of factors including the plunge in the nation’s exports and Japanese investor purchases of foreign securities, Fiona Lake, a Hong Kong-based economist at Goldman Sachs, wrote in a note today. The yen’s “fair value” versus the dollar is 114, indicating the currency is “overvalued,” wrote Lake, predicting the dollar will rise to 105 yen in three months. The Deutsche Bank trade-weighted yen index, measured against the dollar, the euro, the pound, the Canadian dollar and the Australian dollar, rose as high as 121.78 today. That’s still below its 100-day moving average of 126.23. The pound fell to the lowest level in more than a week against the dollar after Nationwide Building Society, the U.K.’s largest customer-owned lender, agreed to buy parts of Scotland’s Dunfermline Building Society in a government-brokered deal to avert the threat of collapse. Sterling weakened 1.2 percent to $1.4152 after touching $1.4111, the lowest level since March 18. The pound lost 0.2 percent to 92.68 per euro. Geithner’s Plan Geithner said yesterday in an interview on ABC-TV’s “This Week” that a plan shore up the nation’s banks with a public- private partnership to finance the purchase of illiquid real- estate assets will ensure banks emerge from the crisis “cleaner” and “stronger.” The plan to remove distressed assets from bank balance sheets through public-private partnerships and the Term Asset- Banked Securities Loan Facility, or TALF, will help to bring the financial crisis to its final stage, according to Credit Suisse Group AG. “The Geithner plan, unlike previous plans, puts us into the ninth inning of the financial crisis,” wrote Credit Suisse analysts Dominic Konstam and Carl Lantz in a note to clients. “If the problem is clogged balance sheets and insufficient capital to support credit growth, the Public-Private Partnership Program plus the TALF 2.0 should allow for the removal of substantial proportion of toxic assets under favorable pricing conditions for the banking system.”

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