TOKYO ? The dollar extended losses against the yen and euro in Asian trade Tuesday on expectations that US interest rates will remain low for a prolonged period as the world's top economy struggles to recover.

The dollar fell to 89.01 yen in Tokyo noon trade from 89.57 in New York late Monday. The euro rose to $1.4840 from 1.4819 but dropped to 132.17 yen from 132.75.

The greenback continued to be pressured after US Federal Reserve chairman Ben Bernanke on Monday signaled the central bank will maintain its easy monetary policy to nurture a sustainable recovery and as inflation remains low.

"Bernanke appeared to hose down expectations for a nearer-term rate hike," noted NAB Capital strategist John Kyriakopoulos. The fed funds rate currently stands at a range of between zero and 0.25 percent.

Speaking ahead of an interest rate decision meeting on December 15-16, Bernanke said the recovery faces "some formidable headwinds," particularly the weak jobs market and tight credit conditions.

The comments followed a better-than-expected US jobs report last Friday that showed that the pace of job losses was slowing.

However, "the positive impact on markets and adjustment to growth expectations following the US jobs report has given way to renewed concerns," said Calyon analyst Mitul Kotecha.

Investors were digesting news that Japan Tuesday agreed on a $274-billion stimulus package to shore up an economy beset by the twin threats of deflation and a strong yen.

The new spending came as data showed that loan growth in Japan continued to slow for the 11th straight month in November, adding further evidence that liquidity injections into banks are not spreading to the broader economy.

Outstanding loans by Japanese banks rose only 0.1 percent in November from a year earlier to 400.5 trillion yen, the lowest rise since December 2007, Bank of Japan data showed.

The central bank last week announced it would offer 10 trillion yen in three-month loans to financial institutions in a bid to boost demand and the flagging economy.

Meanwhile markets also had their eyes on German industrial production for October, amid fresh worries over eurozone growth concerning further bank write-downs and the financial health of Portugal and Greece.

Ratings agency Standard & Poor's on Monday downgraded its long-term credit assessments of the two countries to "negative," voicing pessimism on their capacity to strengthen their public finances and reduce debt.