Dec. 1 (Bloomberg) -- The dollar fell to near an all-time low versus the euro in Asia on speculation European finance officials will refrain from selling their currency to protect exports.

The U.S. currency yesterday dropped to a record after European Central Bank President Jean-Claude Trichet said financial conditions in the region are ``very favorable.'' The dollar yesterday rose against the yen in part on concerns Japan will resume selling its currency.

``It's all really down to the lack of cohesion within Europe about what to do about the euro,'' said Robert Rennie, a currency strategist in Sydney at Westpac Banking Corp. ``The relative proximity of intervention is closer for Japan. Either way, the trend still is for dollar weakness.''

The dollar fell to $1.3308 per euro at 9:38 a.m. in Tokyo, from $1.3280 late in New York yesterday, when it slid to a record $1.3336, according to electronic currency-dealing system EBS. It also dropped to 102.85 yen from 103.05. It may decline to $1.3320 per euro and 102.70 yen today, Rennie said.

``Conditions remain in place for the euro region to grow around 2 percent in 2005,'' Trichet said in comments to the European Parliament's economic and monetary committee in Brussels.

He also said contributions from exports to growth in the third quarter were ``negative,'' and repeated his remark that recent currency movements are ``not welcome.''

The dollar last month weakened against all 16 major currencies tracked by Bloomberg, falling 3.7 percent versus the euro, the most since December 2003, amid concern a record U.S. current-account gap will cut demand for the currency.

`Close Watch'

Japan didn't sell yen for an eighth month in November, the Ministry of Finance said yesterday, even as the currency reached its strongest in almost five years. Finance Minister Sadakazu Tanigaki yesterday called the gain ``a bit rapid,'' and said Japan must ``keep a close watch'' on the yen.

Some currency strategists, such as Paul Chertkow at the Bank of Tokyo Mitsubishi Ltd. in London, expect Japan to sell yen.

``The key level is probably a move down through 102'' yen per dollar, he said yesterday. ``The Ministry of Finance wants to avoid a sustained breach of the 100 level.''

The dollar may also fall on speculation San Francisco Federal Reserve President Janet Yellen will express concern with the U.S. current account deficit when she speaks today. The currency fell as much as 1 percent on Sept. 10 after Yellen said the deficit will widen unless the dollar depreciates.

Central bank chief Alan Greenspan expanded on those comments on Nov. 19, when he said foreign investors may trim purchases of U.S. assets given the record current account gap.

`Persistent Weakness'

``Given the U.S. deficits and the weak tone of European officials, dollar weakness is going to persist,'' said Minoru Shioiri, a currency trader in Tokyo at Mitsubishi Securities Co., a unit of Japan's second-largest bank.

The dollar is down 5.7 percent against a basket of six of its major counterparts this year and needs to drop another 15 percent to cut the country's current-account deficit to sustainable levels and prevent ``disruptions'' to the world economy, according to a study by the Institute for International Economics in Washington.

The current-account gap was a record $166.2 billion in the second quarter.

To contact the reporter on this story: John Brinsley in Tokyo at jbrinsley@bloomberg.net.

Last Updated: November 30, 2004 19:40 EST