The U.S. dollar fell against major currencies in late New York trading on Monday as Japan injected large amount of liquidity into the market in the wake of a devastating earthquake and the European Union (EU) agreed to boost lending capacity to address debt problems.

The Bank of Japan decided on Monday to inject 15 trillion Japanese yen, or 183 billion U.S. dollars, into the financial system and boost its asset purchasing plan to help the markets which have been hit hard by the devastating earthquake and tsunami.

The dollar jumped against the yen after this announcement in New York's early trading session, but retreated later as some strategists expected the Japanese currency to appreciate as insurance firms and others repatriate funds.

Meanwhile, the EU members agreed to boost lending capacity to 500 billion euros (694.9 billion dollars) from 300 billion euros to provide support for the countries with debt problems. They also agreed to ensure that the permanent bailout mechanism to be put in place in 2013 will also offer half a trillion euros in capacity.

The summit of European Union leaders is scheduled for March 24 and 25, during which more details about how to address the inflation pressure and sovereign debt crisis will be discussed.

The euro briefly topped 1.40 against the dollar in early trading, but later failed to hold the level. The dollar index, a gauge of its overall performance against a basket of currencies, fell to 76.379 from 76.746 on Friday.

In late Monday trading, the dollar bought 81.65 yen, comparing with 81.88 late Friday, and the euro rose to 1.3995 dollars from 1. 3890.

The British pound also rose to 1.6174 dollars from 1.6071. The dollar fell from 0.9298 to 0.9242 against the Swiss franc, but rose to 0.9745 Canadian dollars from 0.9729.