Dollar hit by financial jitters

TOKYO, Japan -- The dollar fell against the yen in Asian trade Tuesday, hit by renewed worries about the health of corporate America following a huge loss at US insurance giant American International Group (AIG), dealers said.

The greenback eased to 97.81 yen, down from 97.99 in New York late Monday.

"The dollar came under fresh selling pressure after AIG announced a huge loss because it symbolizes the US-led financial crisis," said Marito Ueda, currency dealer at FX Prime.

Troubled US insurer AIG announced Monday a loss of $24.5 billion in the third quarter of the year, which forced the government to expand its bailout of the troubled insurer.

The latest bailout plan, in excess of $150 billion, is the largest in US history.

The euro was also weaker against the yen, partly because Japan's economy appears to be holding up better than some other major economies," said Ueda.

The euro slipped to $1.2707, down from $1.2748 in New York, and to 124.29 yen from 125.06 yen.

The euro had climbed as high as $1.2930 Monday after China announced on Sunday that it would spend 4.0 trillion yuan ($586 billion) over two years to spur domestic demand, before paring its gains as optimism faded.

"The Chinese stimulus package failed to soothe worries about a global recession," noted NAB Capital economist David de Garis in Sydney. "While we've had some positive news, there is still plenty to worry about."

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