Euro rises 2 pct vs yen, hits session high vs dollar

NEW YORK Jan 24 (Reuters) - The euro extended gains on Thursday, rising two percent against the yen and hitting sessions highs versus the dollar, with traders citing optimism about repayments of cheap three-year loans taken by banks from the European Central Bank just over a year ago.

This suggests that the liquidity crisis that hit euro zone banks a few years ago has eased and is viewed as positive for the euro. Traders said there was broad buying of euros.

Banks took more than 1 trillion euros in the LTRO (long-term refinancing operation) loans from the ECB. A Reuters poll showed traders expected about 100 billion to be paid back next week.

The euro hit a high of 120.43 yen and was last at 120.37 yen, up 2 percent on the day. Against the dollar, the euro hit the day's high of $1.3392 and last changed hands at $1.3385, up 0.5 percent.