Forex News – Dollar extends losses against yen

Important: This page is part of archived content and may be outdated.

The dollar extended losses versus the yen in the European trading session, breaking below levels at which Japanese authorities stepped into the market last week to sell the yen for dollars to tame the Japanese currency’s excessive strength. Japan intervened in the FX markets on August 4th.

Meanwhile, Asian shares went into a nosedive after a 6 percent decline on Wall Street as the U.S. government’s loss of its top credit rating and a piecemeal response to Europe’s sovereign debt woes frayed investors’ nerves.

The dollar fell approximately 1 percent on the day to 76.97 yen. Traders cited selling by a large U.S. bank as pushing the U.S. currency lower.

When asked of his views of the yen accelerating gains today, Japanese Finance Minister Yoshihiko Noda said he was prepared to respond flexibly to market moves after the U.S. Federal Reserve’s announces a monetary policy decision later in the day.

Noda, speaking to reporters after a cabinet meeting, also added that he wanted to watch market moves closely and cooperate with the Group of Seven nations on currencies as necessary.

“I will pay close attention to market movements with a sense of urgency today,” Noda told reporters.

Bank of Japan Governor Masaaki Shirakawa said he needs to be particularly mindful of the risks that a strong yen poses to the Japanese economy.