SINGAPORE - The dollar fell against the yen and rose against the euro in Asia on Wednesday after disappointment over a US banking rescue plan sparked a flight to "safe-haven" currencies, traders said.
In morning trade, the dollar dropped to 90.35 Japanese yen from 90.44 late Tuesday in New York, while the euro fell to $1.2873 from $1.2910. Tokyo markets were closed for a public holiday.
Emmanuel Ng, a currency economist with OCBC bank, said there was "quite a lot of disappointment" in the US measures, which sent Wall Street and Asian stocks lower, adding they "will keep risk aversion fairly evident" in currency markets.
The plan to rescue the troubled US banking system called for a public-private fund aimed at soaking up toxic assets and included new efforts to boost consumer lending, limit home foreclosures and provide new capital for banks.
But analysts and traders said the plan, announced by US Treasury Secretary Timothy Geithner, lacked detail. In reaction, traders rushed to buy the dollar and yen, which have been seen as the safest during recent financial market turmoil.
"Unfortunately the price action in the currency markets suggests that investors are disappointed by the lack of details and are sceptical about the effectiveness of getting the private sector involved," said Kathy Lien at Global Forex Trading.
"There's some balancing going on between transparency and flexibility" in the US measures, said Thomas Lam, senior treasury economist with United Overseas Bank Group.
"Let's not be too premature in judgement," Lam said. "I would judge it post-implementation."
He said a variety of "push and pull factors" are affecting the greenback, and its path is unlikely to be smooth and uniform.
Also on Tuesday, US President Barack Obama hailed Senate passage of a separate 838-billion-dollar economic stimulus plan and pushed for lawmakers to send him a final bill in days.