* Dollar falls vs yen and euro
* Investors await details of $700 billion bailout plan
By Satomi Noguchi
TOKYO, Sept 22 (Reuters) - The dollar fell against the yen
and the euro on Monday as investors awaited details of a planned
$700 billion U.S. bailout of bad mortgage debt, showing some
scepticism about whether it can solve the worst credit crisis
since the Great Depression.
The Bush administration sent the rescue package to Congress
seeking authority to tackle the credit crisis, saying the bailout
is needed to shield the U.S. economy. []
In the proposed package, the U.S. government could acquire up
to $700 billion of home and commercial mortgages and related
assets from U.S. banks, after curbing short selling and
guaranteeing mutual funds in an effort to stabilise financial
markets.
U.S. Treasury Secretary Henry Paulson said on Sunday that
foreign banks will also be able to unload bad financial assets
under the bailout plan, which is aimed at restoring order in a
devastating financial crisis. []
Analysts and traders said the U.S. government plan has helped
restore some confidence in distressed financial markets.
But they also said markets are still unstable as few believe
the rescue package will solve all of the financial system's
problems.
"Doubts over the U.S. government's measures hit the dollar,"
said Hideki Amikura, deputy general manager of the forex section
at Nomura Trust and Banking.
"Investors are wondering if the U.S. steps promise a rosy
future or if they are nothing more than measures to fix
short-term problems," Amikura said.
Activity was subdued in Asia as many investors retreated to
the sidelines ahead of a Japanese national holiday on Tuesday.
The yen recovered against the dollar and the euro following
sharp falls late last week after a series of moves by the U.S.
government sparked a rally in U.S. financial shares on Friday.
But U.S. stock index futures <SPc1> traded lower in early
Asian trade on Monday, suggesting U.S. stocks may give back some
of the gains made in Friday's massive rally.
That might have prompted investors to buy the yen back in
early Asian action, traders said, despite a 1.6 percent gain in
Tokyo's Nikkei share average <> and jumps in other regional
stock markets.
The dollar fell 0.8 percent from late New York trade on
Friday to 106.55 yen <JPY=>, dropping from a high of 108.04 hit
on trading platform EBS late last week.
The euro rose 0.2 percent to $1.4490 <EUR=>, but fell 0.7
percent against the yen to 154.37 yen <EURJPY=R.
Analysts said key questions such as what price the U.S.
authorities will pay for toxic debts and when the buying will
start remained unanswered, making the possible impact of the plan
hard to judge.
"It is certainly not a 100 percent solution to the banking
sector problems and the market is rather cautious," said Etsuko
Yamashita, chief economist at Sumitomo Mitsui Bank.
Yamashita said comments by Federal Reserve Chairman Ben
Bernanke and Treasury Secretary Paulson this week when they
testify before Congress on financial markets and the U.S.
economic outlook may sway market sentiment.
The U.S. bailout plan follows tumultuous developments that
transformed Wall Street last week, including Lehman Brothers'
collapse, the agreed sale of Merrill Lynch & Co <MER.N> and a
government takeover of ailing insurer American International
Group <AIG.N>.
(Additional reporting by Rika Otsuka; editing by Sophie
Hardach)
