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Yen falls, euro rises
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December 27, 2000: 10:15 a.m. ET
Dollar takes middle course, gaining on Japanese currency but sliding vs. euro
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NEW YORK (CNNfn) - The dollar straddled the currency markets Wednesday, falling to a five-month low versus the euro but rising to its highest levels against the yen in 16 months.
In Japan, fresh evidence emerged that the world's second-biggest economy is slipping, less than one week after its main stock market gauge fell to a two-year low.
The reverse holds for the euro. The currency has climbed steadily against the dollar amid signs that the U.S. economy is slowing.
 "The euro gathered further upward momentum as traders' sentiment for the euro-zone continued to brighten," said Alex Beuzelin, market analyst at Ruesch International.
Just before 9:50 a.m. ET, the euro rose to 93.10 cents from 92.97 cents Tuesday. That's the highest level for the single European currency since July. The euro, which hit a record low in October, is down 7 percent since the start of the year, when it traded above $1.
The dollar, meanwhile, rose to 113.97 yen from 113.63 Tuesday.
Japanese industrial production data showed output fell 0.8 percent in November from the previous month. That's worse than the average forecast of a 0.2 percent rise, according to economists polled by Reuters.
At the same time, the Nikkei -- Japan's main stock index -- slipped again Wednesday to a two-year low, another sign that investors are losing confidence in the country's markets.
The day's mixed action for the dollar comes as the U.S. economy is cooling. The nation's gross domestic product grew at its slowest rate in four years last summer, the government said earlier this month.
 The Federal Reserve, the nation's central bank, left interest rates unchanged last week. But the Fed signaled it might lower borrowing costs next year is necessary.
In the U.S. Treasury market, government securities edged lower after making steady gains last week.
The ten-year note slipped 2/32 to 105-4/32. Its yield, which moves inversely to its price, rose to 5.07 percent -- still at some of its lowest levels of the year.
Bonds have outperformed U.S. stocks this year, lifted as the government decreases its borrowing needs and investors fleeing a sinking stock market have sought safety in fixed-income securities.
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