NEW YORK (MarketWatch) — The euro fell to a 22-month low against the dollar on Thursday after comments on potential further easing by European Central Bank President Mario Draghi triggered selling, while the dollar retreated from earlier gains versus the Japanese yen.

Draghi set the tone in European hours, repeating that the ECB could use additional unconventional policy measures if it felt that its inflation target was under threat. That leaves the door open for the central bank to embark on large-scale purchases of government bonds, or quantitative easing, something it has largely resisted.

The euro EURUSD, -0.22% traded at $1.2749 in recent action, down from $1.2780 late Wednesday in New York. The shared currency had dropped as low as $1.2697 in earlier activity, it is the lowest level for the euro since November 2012.

“I don’t think there’s any change in the euro’s long-term downtrend,” said Marito Ueda, director at FX Prime by GMO.

“We can expect Mr. Draghi will likely take various (easing) steps over a prolonged period”, making investors reluctant to actively buy the common currency, but they still need to keep the currency in their portfolios, Ueda added. That will help the euro ratchet down and eventually help it enter a range between $1.20 and $1.25 by March next year, he said.

The dollar lost ground versus the Japanese yen to trade at ¥108.75, down from ¥109.04, after touching ¥109.34, close to a six-year high last week.

The yen rebounded after Japanese Health Minister Yasuhisa Shiozaki reportedly indicated there was no hurry to introduce legislation to change how the country’s Government Pension Investment Fund can invest assets.

Shiozaki’s comments “are at odds with [Prime Minisetr Shinzo] Abe’s comments from Sept. 18 that he aims to carry out GPIF reforms as soon as possible, but nevertheless [the yen] bounced, said Elsa Lignos, senior currency strategist at RBC Capital Markets.