The yen fell the most in eight months against the dollar after Prime Minister Yoshihiko Noda said he will dissolve parliament, paving the way for elections that polls show his Democratic Party of Japan will lose. Japan’s currency weakened versus most of its major peers amid speculation the opposition will win power and pressure the central bank into a more aggressive easing policy.

The dollar dropped versus the euro after Federal Reserve Vice Chairman Janet Yellen said she supports tying a low interest-rate outlook to economic goals and U.S. retail sales fell for the first time in four months.

Yellen joined three other Fed officials who have endorsed tying zero interest rates with progress on fighting unemployment as a way to provide more clarity on the central bank’s outlook for monetary policy. The policy-setting Federal Open Market Committee, which said last month it expects to keep its benchmark rate near zero through at least mid-2015, releases minutes from its October meeting today.

Retail sales in the U.S. fell 0.3 percent in October, following a 1.3 percent increase in September that was larger than previously reported, Commerce Department figures showed today in Washington. The median forecast of economists called for a drop of 0.2 percent.

The pound fell after the Bank of England lowered its growth forecasts. “The weaker gross domestic product profile reflects the judgment that the broader causes and repercussions of the financial crisis may bear down more forcefully on demand and productivity than assumed” previously, the central bank said in its quarterly Inflation Report published in London today. “There seems a greater risk that the U.K. economy may be in a period of persistent low growth.”