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March 17, 2008

Dollar tumbles 3% vs yen as credit crisis deepens

TOKYO - THE dollar plunged 3 per cent against the yen on Monday to hit a 13-year low below 96 yen (S$1.33), with investors dumping the US currency on fears that more major financial firms will become casualties in the fast-spreading credit crisis that claimed US investment bank Bear Stearns.

The dollar tumbled to 95.77 yen from near 99.00 yen in late US trade on Friday and was poised for its biggest one-day drop against the yen since 1998. The euro vaulted to US$1.5905 up 1.5 per cent on the day.

'The market is totally panicking,' said a trader at big Japanese bank. 'The fact that the Fed had to announce its emergency steps on Sunday night highlighted the seriousness of the situation.'

Traders said they were expecting some kind of coordinated intervention from the United States, Europe and Japan to stem the dollar sell-off. -- REUTERS