Aug. 11 (Bloomberg) -- The yen strengthened against the dollar and euro as the price of crude oil fell after Saudi Arabia, the world's largest oil exporter, said it has extra capacity that can be put to use "immediately.''

"The yen's been punished'' as the price of crude oil rose in recent weeks to a record high above $45, said Enrico Caruso, chief currency dealer at currency hedge fund Tempest Asset Management in Newport Beach, California. "People are fearful of heading into Asia'' betting against the yen, given the Saudi comments, he said.

The yen strengthened to 110.71 per dollar from 111.32 yesterday. It also gained as the International Monetary Fund raised its 2004 forecast for Japan's economic growth by a third to 4.5 percent. The IMF cited an expansion fueled by exports and investment that has bolstered consumer spending.

Crude oil for September was down 57 cents, or 1.3 percent, at $43.95 a barrel at 11:48 a.m. on the New York Mercantile Exchange.

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