The dollar fell moderately against the yen in Asia Tuesday as expectations grew for the dollar's drop on upcoming U.S. economic data.
The dollar was trading at 120.40 yen midafternoon, down from 120.56 yen late Monday in New York. The euro stood at US$1.3184, unchanged from late Monday.
"A deteriorating subprime loan market has heightened fears about the U.S. housing market," said Tsutomu Soma, a senior trader at Okasan Securities.
Subprime loans are financing products with high interest rates for individuals with low financial credibility.
Market participants are awaiting U.S. January home sales data due later in the day. If data turn out to be weaker than market forecasts, the greenback will probably fall against the yen, traders said.
Also, economists are expecting a downward revision of U.S. fourth-quarter gross domestic product to be released Wednesday.
Analysts said former U.S. Federal Reserve Chairman Alan Greenspan's bearish remarks provided short-term investors with a cue to start selling dollars. The former Fed chairman said Monday that it was possible that the U.S. economy would fall into recession by later this year, reports AP.
"Gloomy U.S. economic prospects have pushed the dollar lower against the yen," said Osamu Takashima, chief analyst at Bank of Tokyo-Mitsubishi UFJ.