The euro hit a five-month high against the yen

The euro hit a five-month high against the yen in Asia Monday as players' risk appetite recovered on a U.S. plan to remove banks' toxic assets from their books.   A Wall Street Journal report during the weekend on the so-called "bad bank" plan raised appetite for riskier currencies such as the euro, sending it to Y131.97, the highest since Oct. 21, dealers said. Although it lost some of its gains later in the day, it remained substantially higher compared with New York's Friday closing of Y130.15.   Attention now shifts to details of the plan, expected to be announced by Treasury Secretary Timothy Geithner at around 1245 GMT, especially over the purchase price and speed of clearing toxic assets, traders said.   "A positive surprise (about the plan) could bolster sentiment (further) and lift" riskier currencies, said Tsutomu Soma, a senior trader at Okasan Securities.   But "if the plan lacks fresh factors, that will be negative for" those currencies, said Saburo Matsumoto, a senior foreign exchange manager at Sumitomo Trust and Banking.   The euro also got a boost from higher Japanese stocks, with the benchmark Nikkei 225 Average up more than 3% midday, which prompted non-Japanese short-term investors to buy the riskier currencies with yen, traders said.   Meanwhile, the single currency rose about one cent versus the dollar to a high of $1.3685.   Traders say the European currency could rise to Y135.00 this week as the area's higher interest rates, compared with those of the U.S. and Japan, may encourage investors to purchase the currency.   The dollar, meanwhile, rose versus the yen to Y96.16, compared with Y95.90 in New York Friday.   The U.S. unit rallied versus the yen because investors bought the pair to take advantage of the dollar's dive last week to as low as Y93.55, traders said.   However, the U.S. unit faces risks of falling against the Japanese currency, possibly to Y93.50, its lowest in a month, dealers said. If the U.S. long-term interest rate keeps falling due to the Federal Reserve's monetary easing announcement last week, players may start dumping the currency because of narrowing U.S.-Japan interest rate differentials, they said.   The yen may also be supported by Japanese institutional investors, dealers said, because they will likely bring substantial profits earned on overseas assets home toward the March 31 fiscal-year end.   Traders are also focused on U.S. existing home sales data for February, due at 1400 GMT.