The dollar strengthened further against the euro on Monday, with the 12-nation currency dropping below the $1.20 mark, while the U.S. currency also rose to a 16-month high against the yen after a survey of Japanese corporate sentiment fell short of expectations. The euro bought $1.1931 in early European trading, down from $1.2018 in New York late Friday. The British pound also dropped to $1.7538 from $1.7633. The dollar also was up against the Japanese currency, rising to 114.05 yen from 113.60 yen. The euro has been undermined over the past two weeks by concerns over the inconclusive outcome of Germany's election. The final voting Sunday, in a district in the eastern city of Dresden where the ballot was delayed by a candidate's death, delivered an extra parliamentary seat to conservative leader Angela Merkel's conservatives, but did not shift the balance of power. The dollar rose against the yen Monday after the Bank of Japan's quarterly survey of corporate sentiment fell short of expectations. The central bank's tankan headline index of big manufacturers' sentiment came in at 19, slightly lower than the average 20 forecast by economists in a Dow Jones Newswires survey. Despite the disappointing tankan, some economists said the latest survey showed that the recent recovery would continue at a gradual pace. But some investors took the tankan as a cue to start selling the yen, partly because the higher interest rates in the United States have been working to favor the dollar over the yen as an attractive investment recently. "What we are seeing is dollar strength backed by interest-rate differentials, not yen weakness," said Kikuko Takeda, currency analyst at Bank of Tokyo-Mitsubishi.