Yen Falls Most in 3 Weeks as BOJ Says Economy in ‘Severe’ State

The yen dropped the most in almost three weeks versus the dollar after Bank of Japan Governor Masaaki Shirakawa said the economy is in a “very severe” state, fueling bets monetary policy may be eased further.

The euro gained versus most major currencies as stocks and commodities pared losses, while the Japanese currency weakened against all of its 16 most-traded counterparts. The pound rose from almost a one-month low versus the dollar as U.K. inflation accelerated to the highest level since 2008, increasing pressure on the Bank of England to raise interest rates.