Yen falls on data, news

The Japanese yen weakened early Monday as investors became more willing to make riskier deals on the possibility that the US government will put more money into Citigroup (NYSE: C) and after US Senate Banking Committee Chairman Christopher Dodd said Friday that some banks might have to relinquish control to the US government for “a short time”, although other legislators said this will not happen.

Additionally, a new report showing that Japan is showing a trade deficit for the fourth month in a row hurt the yen, while the euro weakened on comments from European Central Bank President Jean-Claude Trichet, who said in a speech that the flow of credit is beginning to dry up in the Eurozone.

The yen traded at ¥94.54 to the US dollar and at ¥120.3565 to the euro at late morning in New York while at the same time the US dollar was at $1.2731 to the shared currency.

The pound saw gains on signs that UK banks are attempting to improve their financial position after Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM) was said to be planning on cutting costs by over £1 billion.

The plan calls for RBS to break into two units and reduce its investment banking activities.

At just before 11 a.m. in New York, the pound traded at 87.56p to the euro while it took $1.4539 to buy a pound and the yen traded at ¥137.4527 to the UK currency.

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