Yen Gains Versus Dollar on Speculation GM to Declare Bankruptcy

June 1 (Bloomberg) -- The yen rose for a second day against the dollar and the euro as speculation General Motors Corp. will file for bankruptcy today spurred demand for Japan’s currency as a refuge from the financial crisis.

The yen advanced versus all 16 of the most-traded currencies after people familiar with the matter said GM will make its announcement before 8 a.m. in New York, adding to signs the global recession is far from over. The euro weakened for the first time in three days versus the dolllar on concern policy makers meeting this week will signal they may take more measures to add funds to the economy to keep down borrowing costs.

“The problem is far from solved, even if GM is dissolved,” said Daisuke Uno, chief bond and currency strategist at Sumitomo Mitsui Banking Corp. in Tokyo. “As the issue drags on, it’ll continue to be negative for the dollar and the yen is likely to benefit.”

The yen strengthened to 94.92 per dollar as of 10:07 a.m. in Tokyo, from 95.34 in New York last week. Japan’s currency gained to 134.19 per euro from 134.96 last week. The euro declined to $1.4117 from $1.4158, after gaining 7 percent last month, its biggest advance since December.

The dollar may fall to as low as 94.25 yen today, Uno said.