Yen Gains, Approaches 12-Year High, as Asian Stocks Decline

The yen rose against the dollar, approaching a 12-year high as Asian stocks fell, prompting investors to pare investments in higher-yielding currencies funded with loans from Japan.

The currency advanced the most against the Australian and New Zealand dollars, favorites of the so-called carry trade. Bear Stearns Cos. yesterday fell to a five-year low on concern the company lacks sufficient access to capital after the Wall Street Journal said traders are reluctant to engage in transactions with the New York-based bank.

With stocks falling, traders are rushing into yen- buying, said Takeshi Tokita, vice president of foreign- exchange sales at Mizuho Corporate Bank in Tokyo, a unit of Japan's second-largest publicly traded lender by assets. ``There are some rumors hedge funds and banks will go into bankruptcy.

The yen rose to 100.10 against the dollar at 1:54 p.m. in Tokyo from 100.65 late yesterday, when it reached a 12-year high of 99.77. Against the euro, Japan's currency gained to 156.48 from 157.35. The euro bought $1.5628 from $1.5635, near a record high of $1.5645. The yen may rise to 99.20 per dollar today, Tokita forecast.