Yen plunges as Japan in 'very severe' state

The yen has plunged against a basket of currencies after the Bank of Japan said the economy is in a perilous state.

The yen fell 0.9% to 81.53 per dollar in early trading in New York after the central bank's governor Masaaki Shirakawa said the economy is in a "very severe" state, reports Bloomberg. Its fall has led to speculation Japan may ease monetary policy further after the 11 March earthquake and tsunami. The Japanese currency has slumped 4.1% this year - the largest decline in the Bloomberg Correlation Weighted Indexes, according to the newswire. The Japanese authorities said damage from March's earthquake was worse than originally thought, but believe the country can end its nuclear crisi...