Dollar Drops to 15-Year Low Against the Yen

TOKYO -- The U.S. dollar slid to a 15-year low against the yen Wednesday, dragged down by the anemic recovery in the world's biggest economy.

The greenback was quoted at 84.71 yen in London, the lowest since 1995.

Investors stepped up selling of dollars after the Federal Reserve announced Tuesday additional monetary easing steps in a bid to shore up the flagging U.S. economy. The central bank also downgraded its assessment of the economy's prospects.

"Investors were unnerved by the Fed's statement. It just confirmed that the U.S. economic recovery is slowing," said a dealer at a Japanese bank in Tokyo. The dealer declined to be named as he was not authorized to talk to the media.

The dollar's recent weakness against the yen has punished shares of Japanese exporters like Sony Corp. as it makes their products less competitive in overseas markets. It can also reduce the value of profits made overseas when they are returned to Japan.

Japan's Nikkei 225 stock average tumbled 258.20 points, or 2.7 percent, to 9,292.85 on Wednesday. Sony Corp. dropped 2.8 percent and Nissan Motor Co. dived 3.6 percent.

The Fed's new measure to stimulate the U.S. economy involves spending a relatively small amount of money by the standards of previous stimulus efforts -- about $10 billion a month, economists estimate -- buying government debt.

The move is designed to drive interest rates on mortgages and corporate borrowing at least a little lower and help the economy grow faster.

In its statement after a one-day meeting, the U.S. central bank said the pace of the recovery "has slowed in recent months." After its last meeting in late June, the Fed was rosier, saying that the recovery was "proceeding" and the job market improving.

Jobs figures for July released earlier this month showed the U.S. unemployment rate stuck at 9.5 percent.