VOA常速英语2008年-US Dollar Drops to 12-Year Low Against Japanese

The U.S. dollar dropped to a 12-year low against the Japanese yen 1, and also sank to new lows against the euro and other global currencies. As Naomi Martig reports from Hong Kong, stock markets in Asia also sold off, in part because of the weak dollar and because of concerns that the U.S. economy is going into recession.

The dollar fell one percent to 100.20 yen in Tokyo trading Tuesday, its lowest rate since 1995. It also hit record lows against the euro and the Swiss franc.

David Mann, chief currency strategist at Standard Chartered Bank in Hong Kong, says the 100-yen level for the dollar is dangerous because it is a psychological mark for investors 2.

"If it goes, if that taboo 3 is broken, then traders will be comfortable with the idea that we can actually see even further losses in the dollar against the yen and so we can be trading into the 90's for some time," he said.

On Tuesday the dollar rallied after the Federal Reserve said it would pump $200 billion into financial markets to ease the credit crunch 4 caused by a hike in unpaid 5 home mortgages.

But the gains quickly vanished because of concerns that the plan is not enough to boost the U.S. economy. Mann says investors are wary 6 of the Fed's plan because they worry about U.S. bank failures.

"The problem is that we are still in a situation of 'can lend, won't lend,' and while we have that type of problem even aggressive monetary 7 easing won't necessarily do it, it'll be a little bit more like just pushing on a string," he said.

Mann says the Fed is also likely to cut interest rates even further.

"Very likely to get a minimum of 50 basis points cut from the next meeting and we are actually expecting the fed funds rate to go all the way down to one percent by the middle of this year," he added.

The dollar's slide against the yen has also sparked concern that Japanese authorities may intervene, as the country has a history of restraining the yen's strength to maintain the competitiveness of exporters.

The U.S. sub-prime mortgage crisis, together with fears that the economy is slipping into recession, is taking its toll 8 on global markets. Mann says the big worry is the possibility the problems could last a long time, similar to the Asian financial crisis in the late 1990s.

Other worries for investors in Asia included rising inflation in much of the region and oil prices nearing $110 a barrel.

On Thursday most major Asian stock markets closed lower. Japan's Nikkei plunged 9 more than three percent, the Hang Seng Index in Hong Kong lost 4.8 percent and the Kospi in Seoul gave up 2.6 percent of its value.