Dollar falls against yen in Asian trading weighed down by Greenspan remarks

The dollar fell versus the yen Friday in Asian trading as the dollar was weighed down by cautionary remarks about the U.S. economy by former Federal Reserve Chairman Alan Greenspan.

The dollar bought 117.04 yen midafternoon Friday in Tokyo, down from 117.62 yen late Thursday in New York. The euro rose to US$1.3294 from US$1.3237.

At a conference Thursday in Boca Raton, Floriday, Greenspan warned that problems in the U.S. subprime mortgage market could spill over into other economic sectors if American housing prices fell.

"Greenspan's remarks certainly have had a great impact on financial markets," said Tsutomu Soma, a senior trader at Okasan Securities. But "even if U.S. economic growth moderates, inflation worries haven't yet receded and the Fed won't likely cut rates soon," he added.

But some analysts said that if the subprime mortgage issues linger, the housing market will collapse, which in turn may push the overall U.S. economy downward, with the dollar slipping further against the yen as a result.

"Financial institutions may become reluctant to lend to individuals at first, and then to corporations," said Mizuho Research Institute senior economist Tomoyuki Ohta, reports AP.

"Business investment will likely weaken, and growth in the U.S. economy may gradually slow down," he added.

The dollar was mixed against other Asian currencies. It rose 0.29 percent to 48.805 Philippine pesos while dipped 0.27 percent against Singapore dollar to 1.5294.