Dollar Skids to Postwar Low Against Yen: 171.9

The dollar plunged 3.95 yen to a post-World War II record low closing of 171.90 yen on the Tokyo Foreign Exchange Market today, despite a reported major effort by Japan’s central bank to support the U.S. currency.

Traders attributed the sharp fall to expectations here of another cut in the U.S. official discount rate, after a reduction over the weekend in the rates charged by both the U.S. and Japanese central banks for loans to commercial banks.

These exert an influence on other interest rates, and lower U.S. rates make dollars less attractive to investors.