The yen also declined against the Australian dollar as the rate banks charge for three-month dollar loans dropped the most in nine months in London, stoking so-called carry trades.
The yen declined to 136.42 per euro at 12:30 p.m. in London from 136.21 late in New York on Oct. 17. Japan's currency also dropped to 101.76 per dollar from 101.69. Against the euro, the dollar was little changed at $1.3411 from $1.3410. The British pound rose to $1.7361 from $1.7281.
The yen declined against 11 of its 16 major counterparts. It fell 0.5 percent against the Australian dollar to 70.40 and slipped 0.6 percent against the Brazilian real, to 48.2311.
The ruble surged against the dollar by the most in more than nine years and also gained versus the euro, after the central bank put a limit on currency-swap positions. The managed currency climbed as much as 1.8 percent, to 25.8838 per dollar, the biggest gain since May 17, 1999. It advanced 0.9 percent to 30.1147 against the central bank's dollar-euro basket maintained by the Bank Rossii, the central bank.
India's rupee rose after the central bank unexpectedly cut its benchmark interest rate by 1 percentage point to counter the risk of an economic slowdown caused by the global financial crisis. The Reserve Bank of India lowered its key repurchase rate for the first time since 2004, cutting it to 8 percent. The currency rose to as high as 48.72 a dollar in Mumbai, from 48.79 before the Reserve Bank of India announced its decision, and 48.88 at the end of last week.
Japan's currency also fell as volatility implied by one- month dollar-yen options declined to 19.42 percent from 20.32 percent at the end of last week, indicating a smaller risk of exchange-rate fluctuations that may erode profits on carry trades. It reached 32.175 percent on Oct. 10, the highest since Bloomberg began compiling data in December 1995.
The dollar declined versus the pound and earlier fell for the first time in four days against the euro on speculation a U.S. housing slump and a seizure in credit markets will tip the world's largest economy into recession.