Source AP ©

U.S. dollar fell against yen in Asia, euro rose to USD 1.4254

The dollar fell against the yen Wednesday in Asia on news that U.S. investment company Merrill Lynch may report third-quarter losses exceeding initial projections.

The U.S. dollar was trading at 114.42 yen midafternoon, down from 114.71 yen late Tuesday in New York. The euro rose to US$1.4254 from US$1.4251.

A Wall Street Journal report that Merrill Lynch Co. is expected to announce later Wednesday third quarter losses $2 billion more than first projected heightened concerns about the outlook for the U.S. and global economies, traders said.

Speculating that unnerved investors may close out risky positions, including bets on yen falls, a wide range of traders bought the Japanese currency against the dollar, the euro and the Australian dollar, traders said.

A drop in Japanese stocks after the Wall Street Journal article was published also fueled such speculation, they said.

"If used home sales data turn out to be weaker than expected, the dollar could fall more," said Satoshi Okagawa, chief foreign-exchange forward trader at Sumitomo Mitsui Banking Corp.

U.S. existing home sales for September, due to be released later Wednesday, were expected to have fallen 4.6 percent on month after dropping 4.3 percent in August, according to economists polled by Dow Jones Newswires.

Ahead of the Federal Reserve's monetary policy meeting next week, traders were watching for data on U.S. durable goods orders and new home sales due on Thursday.

Many expect the U.S. central bank to cut rates by a quarter percentage point to 4.5 percent at the meeting.

Against other regional currencies, the dollar was mixed, rising to 9,155 Indonesian rupiah from 9,140 the previous day, and to 7.7509 Hong Kong dollars from 7.7507. It fell to 1.4626 Singapore dollars from 1.4633, and to 32.553 Taiwan dollars from 32.85.