US dollar falls to a 15-year low against the yen
TOKYO (AP) — The U.S. dollar slid to a 15-year low against the yen Wednesday, dragged down by the anemic recovery in the world's biggest economy.
The greenback was quoted at 84.71 yen in London, the lowest since 1995, before recovering slightly to hover under 95 yen.
Investors stepped up selling of dollars after the Federal Reserve announced Tuesday additional monetary easing steps in a bid to shore up the flagging U.S. economy. The central bank also downgraded its assessment of the economy's prospects.
"Investors were unnerved by the Fed's statement. It just confirmed that the U.S. economic recovery is slowing," said a dealer at a Japanese bank in Tokyo. The dealer declined to be named as he was not authorized to talk to the media.
The yen's recent rise against the dollar has punished shares of Japanese exporters like Sony Corp. as it makes their products less competitive in overseas markets. It can also reduce the value of profits made overseas when they are returned to Japan.
Japan's Nikkei 225 stock average tumbled 258.20 points, or 2.7 percent, to 9,292.85 on Wednesday. Sony Corp. dropped 2.8 percent and Nissan Motor Co. dived 3.6 percent.
Alarmed by the soaring yen, Japanese Trade Minister Masayuki Naoshima said the government will conduct an emergency survey of some 200 exporters to see what affect it is having on their profits.
A spike in the yen "will have a major impact on the Japanese economy," Naoshima told reporters. A ministry official said those 200 companies include major auto and electronics makers.
The government aims to finish the survey by the end of August and hopes to come up with steps to support exporters, the official said.
The Fed's new measure to stimulate the U.S. economy involves spending a relatively small amount of money by the standards of previous stimulus efforts — about $10 billion a month, economists estimate — buying government debt.
The move is designed to drive interest rates on mortgages and corporate borrowing at least a little lower and help the economy grow faster.
In its statement after a one-day meeting, the U.S. central bank said the pace of the recovery "has slowed in recent months." After its last meeting in late June, the Fed was rosier, saying that the recovery was "proceeding" and the job market improving.
Jobs figures for July released earlier this month showed the U.S. unemployment rate stuck at 9.5 percent.