The dollar took a breather in Asian trade Thursday as fresh drops on global stock markets kept dealers cautious.

The dollar was flat at 95.77 in Tokyo morning trade from New York late Wednesday. The euro edged up to 1.2512 dollars from 1.2508 while holding steady at 119.83 yen compared with 119.82.

`Worsening economic conditions have been already priced in and there are few leads to take currency trading ranges to new levels,` said Kenichi Yumoto, vice president of forex sales at Societe Generale.

`There is little surprising news. While the economy spirals down into a bottomless pit, authorities have their hands tied as to what to do, and traders` interest and patience are wearing thin,` he added.

Such worries have been supporting the yen as investors see the Japanese currency as a relatively safe haven in the global financial storm.

The US economy continued to churn out bad news. The US consumer price index plunged 1.0 percent in October -- the steepest one-month fall since the data was first published in 1947 -- stoking deflation fears.

The Federal Open Market Committee signalled in minutes from its October policy meeting that it would make further reductions to its key lending rate, which is already at a record low of 1.0 percent.

Markets `can`t see the bottom of this crisis, which is reflected in plunging stocks and the higher yen,` said Yumoto.

`With little leeway, US authorities have their backs against the wall. Markets are not really hopeful for fresh action,` he added.

Dealers were closely watching developments in the car sector as the heads of the Big Three US automakers -- General Motors, Ford and Chrysler -- appealed to Congress for loans to prevent their industry from collapsing.

Japanese exports meanwhile dropped at the fastest pace in almost seven years, pushing Asia`s largest economy deeper into recession.