HONG KONG - The dollar fell across the board in Asia Thursday while the region's stock markets posted strong gains on growing expectations of new pump-priming measures by the United States.
The greenback dipped to 81.12 yen in early Tokyo trade, its worst showing since April 1995, while also coming under pressure from the euro and Singapore dollar.
The euro hit a 9-month high of 1.4103 dollars before easing back to 1.4087, against 1.3958 dollars in New York Wednesday.
The dollar also slipped to a record low against the Singapore dollar after the city-state tightened monetary policy, while the Australian currency had almost reached parity.
Despite continued dollar weakness against the yen, Tokyo's Nikkei stock index ended 1.91%, or 180.00 points, higher at 9,583.51 as resource firms were lifted by surging commodity prices.
Traders are banking on the US Federal Reserve introducing further monetary easing at its next policy meeting in order to kickstart recovery in the sluggish economy.
Sydney added 1.71%, or 79.2 points, to end at 4,699.1 and Hong Kong ended 1.68% higher, adding 394.48 points to 23,852.17.
Shanghai gained 0.64%, or 18.28 points, to close at 2,879.64 and Seoul ended up 1.26%, or 23.61 points, at 1,899.76.
BBY senior institutional trader Peter Copeland said: "As long as China remains on track and (quantitative easing) underpins the US economy and commodity prices, while sending the US dollar down, I see further upward momentum for equities."
"You now have this perverse situation where bad economic news in the US is good news for equities because it supports the case" for quantitative easing, he told Dow Jones Newswires.
Minutes from last month's meeting of the Fed's Open Market Committee said the central bank was prepared "to provide additional accommodation if needed" to help the economy.
One restraint on the dollar's fall however has been the threat by Japanese authorities to intervene again in currency markets to sell the yen.
The Bank of Japan last month stepped into the markets for the first time in 6 years as the dollar hit 82.86 yen. A strong yen hurts Japanese exporters as it makes them less competitive while also cutting their profits when repatriated.
A 0.69% rise on the Dow Wednesday provided Asian traders with the impetus to continue buying. Wall Street had welcomed a strong set of quarterly corporate data.
The dollar came under broad selling pressure on Thursday with the Singapore dollar surging against the US unit after the city-state's central bank announced a surprise tightening of monetary policy.
The Monetary Authority of Singapore made the announcement after the government said the economy was likely to expend between 13% and 15% this year, leading to concerns over rising inflation.
The Singapore dollar strengthened past 1.30 to the greenback after the announcement, hitting a new high of 1.2938.
Singapore's monetary policy is conducted via the local currency, which is traded against a basket of the currencies of major trading partners within an undisclosed exchange rate band.
Singapore stocks slipped 0.22%, or 7.14 points, to 3,195.02.
Against the Australian dollar the greenback slipped to 99.68, the Aussie's highest since it was allowed to float freely almost 30 years ago.
The weaker US dollar sent commodities higher, with gold ending a record $1,383.00-$1,384.00 an ounce in Hong Kong.
On oil markets New York's main contract, light sweet crude for November delivery, gained 89 cents to reach $83.90 a barrel in the afternoon.
Brent North Sea crude for November advanced 63 cents to $85.27 on its last trading day.