LONDON, Dec 2 - The dollar fell to its lowest against the yen in nearly five years on Thursday as the market tested how far Japan was willing to tolerate the export-damaging impact of dollar weakness and yen strength. Japan's top currency policy official, Hiroshi Watanabe, warned earlier this week that Japan and Europe could act jointly to support the dollar, which has fallen for 10 consecutive weeks on concerns over the U.S. current account deficit.
But traders said such coordinated intervention was unlikely, at least in the near term, and continued to drive the dollar lower. "There seems to have been some downplaying of intervention expectations," said Tim Fox, market strategist at National Australia Bank.
The dollar fell as low as 101.86 yen in early European trade, its weakest since January 2000 after breaking below the psychological 102.00 support level. The dollar was also trading at fresh record lows against the euro, around $1.3380