The dollar on Tuesday, reaching its lowest level against the yen in two years after a report about slow retail sales triggered concerns that the U.S. economy will go into recession.

The dollar has fallen this week on economic concerns, with many investors anticipating that the U.S. Federal Reserve will cut its benchmark interest rate by 0.5 percent in an effort to boost the economy.

The dollar was down to 106.77 yen at 4:54 p.m., after falling as low as 106.61. The euro went down to a four-month low versus the yen of 158.05 per euro. The dollar was at $1.4802 per euro falling as low as $1.4922.

The a government report said on Tuesday that U.S. retail sales fell 0.4 percent last month, with spending reaching its lowest level in five years, a possible sign that consumers are struggling as a credit crisis expands from the financial markets into the consumer sector.