Dollar falls towards 13-year low against yen

Tokyo: The dollar fell towards a 13-year low against the yen and two and a half month lows versus the euro on Wednesday after the US Federal Reserve slashed interest rates to as low as zero.

"Dollar selling pressure from the standpoint of interest rates seems likely to continue," said Masafumi Yamamoto, head of foreign exchange strategy in Japan for the Royal Bank of Scotland.

The Fed on Tuesday cut its target for the federal funds rate to a historic 0.25 per cent, a record low, saying it would use "all available tools" to support the economy.

The Fed's move brought the policy target for the federal funds rate to below the Bank of Japan's 0.30 percent target for the overnight call rate.

The dollar index fell around 0.1 per cent to 80.087, inching back towards a low of 79.795 hit on Tuesday.

The dollar dipped 0.3 per cent against the yen from late US trading on Tuesday to 88.82 yen, hovering near a 13-year low of 88.10 yen hit on trading platform EBS last week.