The yen could remain under downward pressure for some time amid concern over economic and corporate earnings prospects in Japan.

There is speculation that the Japanese government is committed to a weak-yen policy and that the Bank of Japan is leaning in favor of buying foreign securities to funnel more money into the banking system, a scenario typically bearish for the yen.

Indeed, as indicated by highly placed government officials, the yen's depreciation is now widely considered to be in Japan's national interest.

Gloom deepened over economic prospects last week as the BOJ downgraded its assessment of the economy for the seventh consecutive month.

In its monthly economic report, the BOJ sounded a pessimistic note on economic prospects for the months ahead, fully expecting further exacerbation.

Given the plight of the nation's banking institutions, which remain saddled with mountains of bad loans and lingering worries about further downgrades of Japan's sovereign debt rating, an upturn in the yen's value appears unlikely in the near term.

The yen may also feel the effects of contagion from unnerving developments on the global economic front.

But there are worries over the economic prospects of the U.S., as well. The U.S. gross domestic product reportedly fell 1.3 percent on an annual basis in the third quarter, which was steeper than the government previously estimated.

With consumers cutting back on spending, the U.S. economy has slowed visibly in recent months, offering fresh evidence that it was dealt a severe blow on Sept. 11.

The market is now waiting for detailed figures on consumer spending for the Christmas shopping season, which will be made public early next month.

Argentina's effective default on its external debt has added to worries about the bleak U.S. and global economic outlook, and its crisis is weighing on the dollar's value relative to other key currencies.

The dollar could come under selling pressure in 2002 if the forthcoming statistics dash hopes of an early U.S. economic recovery.