LONDON — The dollar fell to a 15-year low against the yen on Wednesday as steps taken by the Federal Reserve to revive a faltering U.S. economy pushed U.S. Treasury yields lower. Japanese Finance Minister Yoshihiko Noda said on Wednesday that he was closely watching forex markets, but analysts doubted his rhetoric would escalate into currency intervention to weaken the yen. "Japan needs the support of the U.S. and Europe to intervene, but the Fed and the European Central Bank are focused on other problems right now so I don't think it is possible at these levels," said Manuel Oliveri, currency analyst at UBS in Zurich. The dollar dropped to 84.72 yen on trading platform EBS, after taking out option barriers at 85.00 and 84.75, in a move fueled by U.S. two-year Treasury yields hitting a record low. "I see no upside for dollar/yen right now and I can see it falling toward 80 yen," said Oliveri. The record low in dollar/yen was hit in April 1995 around 79.75 yen. In a move to reinvigorate a weakening economic recovery, the Fed said on Tuesday it would use cash from maturing mortgage bonds it holds to buy more government debt to help pin down borrowing costs. The move strengthened expectations that U.S. interest rates would stay at record lows, driving U.S. two-year yields to a record low and narrowing the spread over Japanese two-year yields, which pushed the dollar down against the yen. "The fall in U.S. yields is a barometer of the cyclical position of the U.S. economy," said Adam Cole, currency strategist at RBC. "The market's reaction is that if the U.S. economy is slowing materially it will not be in isolation and it has therefore responded by selling risk instead of selling the dollar, which is positive for the yen." The dollar rose against other currencies as investors pared back their exposure to risk, pushing the U.S. unit up 1 percent against a basket of currencies as European shares fell 1.2 percent. At 7:46 a.m. EDT, the dollar had gained more than 1 percent to 81.645, its strongest since late July, as the euro lost 1.3 percent to $1.3000 and the Australian dollar slid 1.2 percent to $0.9030. The yen gained across the board, with the euro down more than 2 percent and the Aussie losing 1.7 percent as equity market falls encouraged investors to shun risk in favor of the low-yielding Japanese currency. Elsewhere, sterling fell more than 1 percent against the dollar after the Bank of England said UK inflation would fall well below its 2 percent target in two years even if interest rates stay low.

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