Dollar hits three-year low against yen as Japan recovers

THE dollar extended its losses on Tuesday, hitting a three-year low against the yen as markets mulled over a new theory Japan would refrain from selling its currency to bolster its exports.

The greenback extended its broad decline in the wake of a weekend call by the Group of Seven major industrial nations for more flexibility in exchange rates.

Currency markets took the G7 statement as a request to Japan and China to stop intentionally weakening their currencies.