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Dollar near 13-year low against yen

business Updated: Jan 22, 2009 22:21 IST

The dollar languished close to a 13-year low against the yen in Asia on Thursday, pressured by doubts about whether US measures to boost the economy will bring quick relief, dealers said.

But the greenback was near to 23-year highs against the pound as traders braced for tough times ahead for the British economy.

The dollar slipped to 88.86 yen in Tokyo morning trade from 89.45 in New York late Wednesday, when it briefly hit 87.10, the lowest since July 1995.

The euro slipped to 1.2972 dollars from 1.3022 and to 115.27 yen from 116.49.

The greenback risks falling below 87 yen if US measures undertaken by US President Barack Obama to revive the economy fail to boost market sentiment, a dealer at a major Japanese currency broker told Dow Jones Newswires.

"The power of balance in the currency market has been so unstable recently. So if doubts over Obama's stance on the economy and markets emerge... players will have no choice but to buy the yen," he added.

Markets also remained worried over the confirmation of Treasury secretary designate Timothy Geithner after he admitted having failed to pay income taxes, dealers said.

Geithner apologized Wednesday over past tax transgressions while vowing to act with "strength, speed and care" to revive the stricken US economy at a confirmation hearing before the Senate finance committee.

Markets were also worried about the health of the flagging British economy. Expectations were growing that the Bank of England would slash interest rates next month, bringing down its key lending rate to one percent.

British unemployment rose to a decade high of 6.1 percent in the three months to December.

Recession is expected to become official in Britain on Friday as the economy contracts for a second straight quarter.

The pound slipped to 1.3879 dollars from 1.3957, edging back down towards Wednesday's 23-year low of 1.3621 dollars, prompting calls from the French and Irish finance ministers for London to prop up the ailing currency.