The US dollar fell to its lowest level against the yen in more than two years on Wednesday.

In Asian trading the dollar fell to 120.00 yen, while the euro reached $1.3809 - lower than the record set earlier in the week.

It is thought that weakness in the US housing market has contributed to the dollar's decline, with the situation boosting the yen's position.

Speaking to the Reuters news agency, Tsutomu Soma, a senior manager at Okasan Securities, said: "The yen was the weakest currency among the euro, dollar, yen trio until recently."

The dollar continues to be the weakest and many commentators expect that it will carry on falling, he added.

On Tuesday the pound reached a 26-year high against the dollar, but fell again following the publication of data by the Confederation of British Industry that showed the manufacturing sector had fewer orders in July.