TOKYO (AFX-ASIA) - The dollar continued to weaken against the yen in midafternoon trade, falling below the 116.00 level, following a Wall Street Journal report earlier that WorldCom may file for bankruptcy protection as early as Monday, dealers said. In addition of the WorldCom report, the dollar was also pressured by negative corporate earnings news, as well as weakness in US stockmarkets overnight, they said. Shares of Microsoft Corp fell in after-hours trade after it left its outlook unchanged from current consensus expectations, which disappointed investors who had hoped to see evidence of an improving IT environment. AOL Time Warner stock also dropped, coming under pressure from reports of unconventional accounting, and weakness in AOL advertising sales. However, the dollar's downside is limited in Tokyo trade after it breached the 116.00 level, on growing fears of intervention by Japanese authorities. "If one considers the negative corporate-related news, investors will continue to avoid buying the US unit for the time being," Akihiro Yuuki, dealing section manager at Chiba Bank, said. Yuuki said he does not expect dollar short-covering to support the US unit. "In order for the US unit to rise, other positive news, together with dollar short-covering, is necessary," he said. In the interim, the dollar will continue to weaken, he said, adding that "it is possible that the dollar will reach the 113.00 level pretty soon". Yuuki said one options to support the US currency is joint intervention. "I think Japanese authorities will step into the market eventually. But, they have not stepped into the market so far, although they intervened aggressively at the 120.00 level. "It is quite uncertain what kind of plan Japanese authorities have in their minds," Yuuki said. Joint intervention with the Federal Reserve is possible, Yuuki said. "I don't think US currency officials welcome the current sharp fall of the dollar." The euro was higher against the dollar due to the US unit's weakness, dealers said. Yuuki said the euro will continue to trade at parity against the dollar for the time being, adding that the euro/dollar will move in the range of 1.00-1.03 over the coming week.