Dollar, euro fall against yen amid recession concerns

In London morning trade, the euro fell to 1.3589 dollars from 1.3618 dollars in New York late on Tuesday. The European single currency also dropped to 137.16 yen from 139.01.

Against the Japanese currency, the dollar dropped to 101.00 yen from 102.07 yen on Tuesday.

A top US central banker, Janet Yellen, said Tuesday that the United States ‘appears to be in a recession.’

The German economy was meanwhile heading for a slowdown, but the downturn would not be long-lasting, Chancellor Angela Merkel said Wednesday.

Dealers were buying the yen as the currency is generally seen as a haven amid the financial crisis.

‘Worries over banks' bankruptcies are gone, so there will be no panic yen-buying anymore,’ Shinkin Central Bank senior dealer Hiroshi Yoshida told Dow Jones Newswires.

‘But players are pessimistic about the global economy ahead. The yen will likely appreciate gradually in the long-term,’ he said.

Janet Yellen, the head of the San Francisco branch of the Federal Reserve, said Tuesday that the United States ‘appears to be in a recession.’

Foreign exchange dealers were meanwhile awaiting the release Wednesday of US retail sales data.

‘In the US, the rather unpleasant cocktail of rising unemployment, falling equity prices and a collapsing housing market should ensure that retail sales contract for the third consecutive month,’ said Daragh Maher, Calyon's deputy head of global foreign exchange strategy.

Ahead of the US data, an EU statement showed that inflation in the 15 nations sharing the euro had slipped for the second month running during September, this time to 3.6 percent.

Elsewhere on Wednesday, sterling rose versus the dollar and euro even as data revealed Britain's unemployment had jumped to 5.7 percent, an eight-year high.

In London morning trade Wednesday, the euro changed hands at 1.3589 dollars against 1.3618 late Tuesday, at 137.16 yen (139.01), 0.7782 pounds (0.7829) and 1.5488 Swiss francs (1.5487).

The dollar stood at 101.00 yen (102.07) and 1.1404 Swiss francs (1.1370).

The pound was at 1.7448 dollars (1.7394).

On the London Bullion Market, the price of gold rose to 849.50 dollars an ounce from 832.50 dollars late on Tuesday.