Dollar on rack after G7 forex plea

THE dollar fell to its lowest in 30 months against the yen on Monday after the Group of Seven meeting called for flexible exchange rates.

The weekend plea raised speculation among traders that Japan would refrain from intervening to weaken the yen.

The dollar fell to 111.37 yen in early trade from 114.01 yen on Friday, recovering to 111.95. Sterling rose 1.5 cents to $1.6480. The dollar also fell against the euro, which was at 1.1457, up more than a cent.

The Japanese authorities have repeatedly stepped into the markets this year to prevent the yen from rising. That has helped protect the country's fragile recovery by boosting its exporters.

Washington has campaigned to prevent such heavy-handed moves. Some traders predicted Japan would allow the yen to strengthen to 110 to the dollar.