Dollar flounders in Asian trade in market storm

TOKYO, September 18, 2008 (AFP) – The dollar fell further in Asian trade Thursday as the US bailout of insurer AIG failed to quell market fears that more victims could emerge from the credit crisis, dealers said.

The dollar traded narrowly, changing hands at 104.77 yen in Tokyo morning trade from 104.91 in New York late Wednesday, down five percent from a month ago.

The euro strengthened to 1.4380 dollars from 1.4344 and edged up to 150.63 yen from 150.50.

Japanese shares plummeted in the morning session following a plunge on Wall Street and European stock markets amid persistent fears over the health of the US and European financial sectors, dealers said.

Britain’s biggest mortgage lender HBOS reached a quick deal Wednesday to merge with rival Lloyds TSB as financial markets reeled from the collapse of US investment bank Lehman Brothers.

“What is happening is mind-blowing and scary for the real economy in the next 10 years,” said a London-based Citigroup equity analyst who had watched shares of HBOS nosedive 52 percent prior to the news of the merger.

“What is more amazing is at the speed that institutions more than 100 years old are capable of crumbling. More than half of the marke