London, Oct. 22 (Bloomberg) -- The yen weakened against the dollar after Haruhiko Kuroda, Japan's vice finance minister for international affairs, signaled the currency is likely to extend a three-month decline. ``The yen is correcting from its excessive strength,'' Kuroda said. ``The basic trend of currency movements remains unchanged.''
The yen weakened to 125.38 against the dollar at 7:45 a.m. London time from 124.76 late yesterday. Against the euro, it fell to 121.84 from 121.64. The yen has dropped almost 8 percent against the dollar since July 16, when it reached this year's high of 115.54. That's pared its gain in 2002 to 5 percent.
Kuroda made the remarks after meeting yesterday with John Taylor, U.S. undersecretary of the Treasury for international affairs. That raised speculation the U.S. may tolerate a weaker yen which may help the world's second-biggest economy by boosting earnings at Japan's export companies, traders said. ``The pressure appears to be increasing on Japan'' to weaken the yen, said Peter Stoneham, a senior currency analyst at Thomson Financial, who favors the dollar over the yen in coming days. ``The U.S. is definitely getting impatient.'' The Japanese currency may weaken to 126 this week, he said. //www.quote.bloomberg.com