| |
| |
![]() |
| |
|
| |
|
| |
|
TOKYO : The dollar fell to two-month lows against the yen in Asia on Tuesday as the Lehman Brothers' bankruptcy sparked worries over the entire global financial system, analysts and dealers said.
The dollar was changing hands at 104.34 yen in Tokyo afternoon trade, down from 104.89 yen in New York late Monday. It was a sharp drop from the nearly 108 yen to the dollar before the Lehman collapse.
The greenback fell to a low of 104.03 briefly, the lowest level since July 16, with Lehman Brothers failing and insurer American International Group (AIG) seeking help.
The euro edged up to 1.4257 dollars from 1.4227 while falling to 148.78 yen from 149.07-17.
"Concerns over the whole financial system weighed the market," said Satoru Ogasawara, foreign exchange strategist at Credit Suisse in Tokyo.
Ogasawara said the US government may need to inject public funds into troubled banks to stabilise markets -- but it would not be able to give blanket support for all banks.
"There must be criteria to inject public money, taking into account the possibility that failures of banks would trigger systemic risks globally," he said.
Traders saw little reason for market conditions to calm in the near term, meaning the dollar could break below 100 yen in the near term.
"The dollar could possibly be traded in a 95-100 yen range in a week or two," Jun Kitazawa, head of FX at Brown Brothers Harriman Investment Services, told Dow Jones Newswires.
The turmoil stemming from Lehman Brothers and other financial firms has sparked renewed talk that the Federal Reserve, which meets Tuesday, could lower rates to calm market turmoil.
But analysts said that any decision by the Federal Reserve could be interpreted as a negative for the dollar.
"Since many players are pricing in a rate-cut, a stand-pat decision will disappoint markets, which may lead to another drop in New York stock prices," says Tohru Sasaki, chief currency strategist at JPMorgan Chase in Tokyo.
The Bank of Japan's policy board began a two-day meeting Tuesday.
The bank is widely expected to keep its key interest rate at 0.5 percent, which is the lowest among major economies, due to concerns that the world's second-largest economy will fall into recession.
The euro also remained under pressure over gloomy prospects for the European economy. The dollar last Thursday soared to a 12-month high of 1.3882 against the euro.
"The euro is the weakest currency among the group of the dollar, yen and euro due to ongoing risk-aversion movements and falling crude oil prices," said Hiroshi Yoshida, a senior dealer at Shinkin Central Bank.
The dollar was mixed against Asian units.
It rose to 47.24 Philippine pesos from 47.07 on Monday, to 1.4312 Singapore dollars from 1.4308, to 32.17 Taiwan dollars from 32.05 and to 1,158.30 South Korean won from 1,106.75.
The dollar fell to 9,450.0 Indonesia rupiah from 9,462.5 and to 34.23 Thai baht from 34.55.
- AFP/ir
|
