The U.S. dollar continued to fall against the yen on Wednesday amid speculation that a struggling housing market will continue to have a negative impact on the U.S. economy, adding to the view that money policy makers will make another interest rate cut next week.
The National Association of Realtors said sales of existing homes fell 8 percent last month to 5.04 million compared to 5.48 million in August, the lowest rate since 1999 when the Association began keeping track.
Another factor contributing to uncertainty in the economic outlook was news that the largest U.S. brokerage, Merrill Lynch, suffered larger-than-expected write-downs on asset-backed securities and subprime loans.
Federal Reserve officials meeting next week will consider if the economy needs an additional boost through lower interest rates. On September 18, the Fed lowered the benchmark bank overnight lending rate by half a percentage point to 4.75 percent.
The dollar fell to 114.27 yen in late session trading compared to 114.40 before the reportand 114.74 in late trading on Tuesday. The dollar also fell against the euro, reaching $1.4266 per euro compared to $1.4248 before the data was released.
Investors fled to more stable investments, including treasury bonds which rose in prices Wednesday.