By Lukanyo Mnyanda and Candice Zachariahs April 9 (Bloomberg) -- The yen fell for a second day against the euro as signs the global economy is improving and speculation Greece will get an international bailout to avoid a default damped demand for Japan's currency as a refuge. The yen weakened most against higher-yielding currencies including the New Zealand dollar and South African rand as the MSCI World Index of stocks snapped two days of declines and a report showed German exports rose the most in eight months. The pound advanced against the dollar after data showed U.K. producer prices jumped more than economists predicted in March. The rand climbed after the country's state-owned electricity supplier received approval for a $3.75 billion World Bank loan. "The general trend remains positive risk appetite," said Lauren Rosborough, a senior currency analyst at Westpac Banking Corp. in London. "We are at a point where the market has turned a tail on its view on the yen. While the U.K. and Europe continue on a more medium-term basis to be in the doldrums, in the short term we are seeing a relief rally." The yen depreciated to 125.44 per euro as of 10:46 a.m. in London from 124.75 in New York yesterday, and to 93.73 per dollar, from 93.38. The euro advanced to $1.3411 from $1.3361. Every major stock market in Europe advanced after Germany's Federal Statistics Office said exports rose 5.1 percent in February after dropping a revised 6.5 percent the previous month. The MSCI World Index climbed 0.4 percent. 'Not an Issue' The euro gained for a second day against the dollar after European Central Bank President Jean-Claude Trichet said a European Union and International Monetary Fund plan to avoid a default by Greece probably won't be needed. He made the comments in an interview with Italy's Il Sole-24 Ore newspaper. The ECB president, who is scheduled to speak in Milan today, said yesterday a default for Greece "is not an issue." Greece may need to seek emergency aid from the IMF within days as a surge in financing costs makes funding its budget deficit unsustainable, according to UBS AG. Yields on Greek two- year notes, which fell about 40 basis points today, are still more than 200 basis points higher than they were a week ago. "The recent market action means that an external intervention may be unavoidable and could happen very soon as the situation is untenable," a UBS team including Chief European Economist Stephane Deo in London wrote in a note to investors yesterday. "We think an intervention over the weekend is a distinct possibility." Pound Gains The pound strengthened 0.7 percent to $1.5358 and appreciated 0.3 percent to 87.20 pence per euro, headed for its longest sequence of gains versus the common currency since January 2007. The cost of goods at U.K. factory gates increased a greater-than-forecast 0.9 percent from the previous month, the Office for National Statistics said today in London. The rand gained 0.5 percent to 7.2362 versus the dollar and was 0.2 percent stronger at 9.7033 per euro. It rose against 14 of its 16 most-actively traded peers. The World Bank agreed to help Eskom Holdings Ltd. build one of the world's largest coal-fired power plants, the institution's first major loan to South Africa since apartheid ended in 1994, the bank said in an e-mailed statement yesterday. South Korea's won gained for a second week after EPFR Global reported equity funds focused on developing nations took in the most money in six months in the week ended April 7. Yuan Speculation The won was also supported by speculation China, the biggest buyer of Korean exports, will let its currency strengthen. U.S. Treasury Secretary Timothy F. Geithner met in Beijing yesterday with Chinese Vice Premier Wang Qishan amid rising pressure from American lawmakers for the yuan to be allowed to appreciate. "One of the main reasons why we're seeing the strength in the Korean won is because of capital inflows," said Sam Hong, a currency dealer with Shinhan Bank in Seoul. "There's also the possibility that the yuan will appreciate." The won climbed 0.5 percent today to 1,118.15 per dollar. The currency reached 1,117.4 on Jan. 11, the strongest level since September 2008. Australia's dollar headed for a second weekly gain versus the greenback as the nation's interest-rate advantage over the U.S. widened to near the most since 2008. Central bank Governor Glenn Stevens raised the benchmark rate to 4.25 percent on April 6, the fifth increase is six meetings. The extra yield offered by two-year Australian debt over similar maturity Treasuries rose to 398 basis points on April 7, the most since July 2008. "It's pretty clear from the tone of the RBA statement this week that it's confident the recovery is solidly in place," Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp., said in a Bloomberg Television interview. "We'd be looking for the greater result on Aussie-yen, which we should see in the high 80s and perhaps pushing 90 multi-week." Australia's dollar was at 87.20 yen from 86.74 yen after touching 87.52 on April 7, the most since September 2008. It traded at 93.10 U.S. cents today, from 92.88 cents yesterday. -- With assistance from Ron Harui in Singapore, Sandrine Rastello in Washington and Carli Lourens in Johannesburg. Editors: Justin Carrigan, Nicholas Reynolds

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