Dollar Falls for Third Day Versus Yen

The dollar fell for a third day against the yen after a majority in the U.S. House of Representatives voted against a $700 billion rescue of the financial industry.

The yen gained against the Australian and New Zealand dollars as investors pared so-called carry trades on speculation the U.S. stock market sell off will spread to Asia. The pound extended declines against the dollar after its biggest intraday drop in 16 years yesterday and the euro fell for a second day as European governments bailed out banks.

The dollar fell to 103.77 yen as of 8:29 a.m. in Tokyo from 104.18 late yesterday in New York. The euro was at 149.24 yen from 150.38 yen. The euro fell to $1.4376 from $1.4434. The pound declined to $1.8012 from $1.8086. The dollar may weaken to 103 yen today, Sahara forecast.

The Australian dollar tumbled 4.4 percent to 82.73 yen from late yesterday in Asia, while the New Zealand dollar slid 3.4 percent to 69.36 yen. In carry trades, investors get funds in countries with low borrowing costs and buy assets where returns are higher. Japan's 0.5 percent target lending rate compares with 7 percent in Australia and 7.5 percent in New Zealand. The risk is currency moves erase profits.

The euro extended declines against the dollar and the yen after Belgium, the Netherlands and Luxembourg gave an 11.2 billion euro ($16.1 billion) lifeline yesterday to Fortis, the largest Belgian financial-services company. The pound fell after the U.K. Treasury seized Bradford & Bingley Plc yesterday, the nation's biggest lender to landlords.,
9/29/2008 5:25:08 PM