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The yen strengthened the most against the dollar since 1999 after Lehman Brothers Holdings Inc. filed for bankruptcy, prompting traders to sell higher- yielding assets financed by loans in Japan.

Japan’s yen and the Swiss franc gained versus every other major currency as the Wall Street firm’s collapse encouraged investors to reverse carry trades. The dollar rose against Brazilian real and the Mexican peso as investors sought the relative safety of U.S. Treasuries.

“Carry trades had a double-whammy today as concern about financial firms fed into risk aversion and concern about global growth compounded the hit,” said Paresh Upadhyaya, who helps manage $50 billion in currency assets as a senior vice president at Putnam Investments in Boston. “It’s a perfect storm.”

The yen advanced 2.80 percent to 104.92 per dollar at 4:18 p.m. in New York, from 107.94 on Sept. 12. It was the biggest increase since the yen gained 2.81 ...Read More

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NEW YORK - Oil prices closed below US$100 a barrel for the first time in six months Monday, tumbling in another dramatic sell-off as the demise of Lehman Brothers and the sale of Merrill Lynch deepened worries about the U.S. economy.

Crude prices shed more than $5 a barrel and have now given up virtually all their gains for the year, extending a steep, two-month slide from record levels above $147 a barrel.

Oil’s pullback also came as early signs suggested that hurricane Ike delivered less damage than feared to the Gulf Coast energy oil and gas infrastructure. But pump prices jumped above $4 a gallon in parts of the United States as a precautionary shutdown of Gulf refineries caused gasoline shortages.

The latest sell-off in oil began Sunday and accelerated Monday as traders digested a day of dramatic upheaval on Wall Street: Lehman Brothers Holdings Inc., a 158-year-old investment bank, filed for bankruptcy after failing to ...Read More

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