TOKYO, June 1 (Kyodo) — The U.S. dollar fell into the upper 94 yen range Monday morning in Tokyo as investor worries were stoked by the U.S. government's announcement of ailing automaker General Motors Corp.'s planned bankruptcy.
At noon, the dollar fetched 94.81-86 yen, down from 95.28-38 yen in New York and 96.44-46 yen in Tokyo at 5 p.m. Friday.
The euro traded at $1.4150-4155 and 134.20-25 yen against $1.4155-4165 and 134.87-97 yen in New York and $1.4000-4001 and 135.02-06 yen in Tokyo late Friday.
At the outset of Tokyo trading, the dollar changed hands at the lower 95 yen level, continuing weak from New York Friday.
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With the imminent GM bankruptcy, the dollar dropped into the upper 94 yen range, falling at one point to a morning low of 94.67, traders said.
In midmorning trading, the news reached Tokyo that the U.S. government had on Sunday announced a set of measures -- including effectively nationalizing GM -- after its planned Chapter 11 bankruptcy filing Monday morning.
GM's Chapter 11 filing will mark the largest nonfinancial corporate failure in U.S. history.
"If you look at Tokyo stocks' rise in the morning, the market was not surprised by the bankruptcy since it has already digested it," said Masashi Hashimoto, a senior analyst in the global markets sales and trading division at the Bank of Tokyo-Mitsubishi UFJ.
"Still, there will be companies that will feel the pain from this move and employment will be affected," Hashimoto said. "It is this uncertainty that is turning off investors."
Dealers said investors were also discouraged from buying the dollar due to the lower-than-expected U.S. gross domestic product data for the January-March period, released Friday.
The revised first-quarter U.S. GDP figures showed the economy shrank 5.7 percent, slightly less than the initially reported 6.1 percent, but this was enough to worry investors about U.S. economic health, dealers said.
"This morning, what we are seeing is a currency market that is dominated by risk aversion, with investors selling the dollar and buying the yen," Hashimoto said.
When investors become risk averse, they usually unload risky dollar denominated assets and seek the relative safety of the yen.