Article by ForexTime
The yen tumbled versus major currencies in Asia Thursday, hitting a fresh seven-year low against the dollar as investors remain keen to sell off the Japanese currency following extra easing by the Bank of Japan late last month.
The greenback surged to ¥118.64, busting past ¥118.54, its highest since August 2007. It topped Wednesday’s high of ¥118.09 set in New York. The euro climbed to ¥ 148.70, a high not seen since October 2008.
“The ¥120 level is now in sight, with no major resistance points in view up to that level,” said Takahiro Iizuka, a treasury department trader at Mizuho Trust & Banking.
“The latest BOJ easing and robust U.S. economy are among the primary reasons for the uptrend,” he added.
Mr. Iizuka characterized the recent one-way moves as a situation where there are many players that have missed out on opportunities to buy dollars amid the hasty rallies and that strong dip-buying has inhibited any big falls.
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Traders are also keeping in mind a strengthening correlation between the yen’s weakness and a rise in Tokyo share prices.
They say overseas investors have been apparently engaging in a combination of “a sell-yen and buy-stock” strategy ahead of a lower house election expected on Dec. 14 following Tuesday’s decision by Prime Minister Shinzo Abe to put off a hike in sales tax.
The euro is also likely to continue its upward march against the yen even after it rose 7% from ¥138 at the end of last month following the BOJ’s easing, said Yunosuke Ikeda, head of FX strategy at Nomura Securities.
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