Worries about the U.S. economy sent the dollar tumbling Thursday to a 12-year low against the Japanese yen and hitting record lows against the euro.
The euro exceeded $1.56 for the first time, and the dollar fell as low as 99.75 yen, before bouncing back to 100.16 yen. It was the first time the U.S. currency has traded below 100 yen since November 1995.
The dollar has been declining on growing speculation that the Federal Reserve will cut interest rates further to shore up the sagging American economy and calm jittery financial markets.
"I'd say about 70 percent of the selling today was based on U.S. factors, with the other 30 percent coming from Japan," said Yoku Ihara, manager of the investment information department at Retela Crea Securities. "The Fed has been doing various things to solve the credit crisis but nothing's been working."
Asian stocks dropped to their lowest point in a week. Japan's Nikkei slid 3.3 percent to a new, two-year closing low. Hong Kong closed down nearly 5 percent.
Analysts described the markets as fearful, following news that a Carlyle group fund had moved closer to collapse.
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