Dollar hits post-war low against the yen

March 24, 1995|By Bloomberg Business News

NEW YORK -- The dollar tumbled to a post-World War II low against the yen yesterday for the third time in four days amid lingering concern about the United States' widening trade deficit with the rest of the world.

The U.S. currency slid Wednesday, and again yesterday, after the Commerce Department reported that the U.S. trade deficit in goods and services jumped 68.4 percent, to $12.2 billion, in January.

The huge U.S. trade gap hurts the dollar by putting a wealth of dollars into the hands of foreign exporters, who convert them into their own currencies to return revenue home.

"The trade number is still fresh in people's minds, and that's why the dollar is still trading lower," said Betsy Reetz, head of currency sales to fund managers at National Westminster Bank in New York.

After plunging overnight in overseas trading, the dollar dropped to a post-war low of 88.01 yen yesterday and was last quoted at 88.11 yen, down from 89.03 yen late Wednesday in New York. The dollar was last quoted at 1.4037 German marks, little changed from Wednesday.

Dealers said the sharp fall overnight led the Bank of Japan to intervene in the currency markets to prop up the dollar. The Bank of Japan has repeatedly expressed its concern that a strong yen will make its exports too expensive.

The central bank intervened again this morning in Japan, lifting the dollar to 88.475 yen by late morning.

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