TOKYO: The dollar fell against the yen on Wednesday, approaching its post-war record low, with the US unit pressured by expectations of fresh monetary easing by the US Federal Reserve, dealers said.
The dollar bought 76.30 yen Wednesday afternoon in Tokyo, compared with 76.39 in New York the previous day.
At one point, the safe-haven Japanese unit surged to 76.10, near its post-World War II high 75.95 yen marked on August 19.
The euro was flat at $1.3702 but edged down to 104.59 yen from 104.66.
Markets were waiting to see what action the Federal Open Market Committee, the key policy body of the US Federal Reserve, takes to boost the ailing US economy when it meets later in the day.
"Market players are on the sidelines, waiting for results of the FOMC," said Yosuke Hosokawa, head of forex group of Chuo Mitsui Trust Bank.
"If the Fed announces monetary easing measures, it is likely to lead to a decline in (US) interest rates and increase selling pressure on the dollar," Hosokawa said.
"So the yen is likely to be a buying target as a risk-hedging means," Hosokawa said. "Under the current situation, it would not be a surprise if the yen breaks the post-war record high at any time."
Japan's Finance Minister Jun Azumi said Wednesday that he was keeping a close eye on speculative moves in the foreign exchange market, reiterating the government's policy of intervening in the market if deemed necessary.
The foreign exchange market largely ignored Japan's much larger-than-expected trade deficit in August announced earlier in the day.
The finance ministry said the deficit reached 775.3 billion yen ($10 billion), the biggest-ever red-ink figure for August, reversing the year-before surplus of 63.8 billion yen.
The dollar was lower against regional Asian currencies.
It fell to Sg$1.2629 from 1.2692 on Tuesday, to 1,149.38 Korean won from 1,155.20 and to Tw$29.88 from 29.95.
The greenback also retreated to 8,948.75 Indonesian rupiah from 9,040.00, to 43.47 Philippine pesos from 43.66 and to 30.41 Thai baht from 30.60.
Copyright AFP (Agence France-Presse), 2011
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