LONDON (AFX) - The yen remained weak in early trade as the overnight fall in share prices compounded the negative economic and political news out of Japan, dealers said.
"The fall in the Nikkei 225 below the 12,000 mark has exacerbated the negative sentiment that is already there," Barclays Capital strategist Jane Foley said.
She said the government's economic package last week had not convinced the market, which was further depressed by the inconclusive nature of Japanese prime minister Yoshiro Mori's resignation at the weekend.
"Overall, there's very little positive news out of Japan and the further fall in the stock market is another factor driving the yen lower," Foley said.
Elsewhere, the euro languished below the 0.93 usd barrier for no particular reason.
"There isn't any huge change of sentiment with regard to the euro today," Foley said.
"It's really a continuation of the same. Sentiment in the euro hasn't been particularly good apart from the initial weeks of the euro," she said.
As for the dollar, dealers said the currency's resilience in spite of yesterday's sharp fall in U.S. equity prices appeared to reflect confidence that the Federal Reserve would act to reverse the economic slowdown.
At its March 20 meeting, the Federal Open Market Committee is expected to cut rates by another 50 basis points.
Dealers said investors would in the meantime scrutinise U.S. economic figures for rate-cut clues.
"A relatively modest set of U.S. retail sales figures is expected today," GNI's Peter Osler said in a research note.