* Euro rebounds on renewed Greek loan deal hopes
* Also buoyed by stop-loss buying -trader
* Yen hits 6-1/2 mth low vs euro, 7-1/2 mth low vs dlr
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, Nov 22 The euro hit a 6-1/2
month high against the yen on Thursday, supported by revived
hopes of a Greek loan deal, while investors gave the yen a wide
berth on expectations of more forceful monetary easing in Japan.
Investors had initially sold the euro on Wednesday after
international lenders failed to reach a deal to release
emergency aid for Greece, but quickly reversed those trades
after German Chancellor Angela Merkel said a deal was still
possible next Monday when they meet again.
After having regained its footing the previous day on
Merkel's comments, the euro got an added boost in Asia on
Thursday on stop-loss buying, which helped lift the single
currency to 106.27 yen, its highest level since early May.
The euro last traded at 105.94 yen, up 0.1
percent from late U.S. trade on Wednesday. Against the dollar,
the euro edged up 0.1 percent to $1.2846, up a full cent
from the previous day's low near $1.2735.
The yen fell broadly and touched its lowest level since
April against a number of currencies, including the dollar
and the Australian dollar.
The dollar has climbed roughly 3.9 percent against the yen
in the last seven trading sessions, with the yen dented by
market expectations that the likely next Japanese government
would push the Bank of Japan to implement more drastic monetary
Analysts say the yen's weakness could persist going into an
election in Japan next month.
"Markets remain firmly focused on the prospects for a more
aggressive post-election BOJ monetary policy stance, implying
that the yen is likely to remain vulnerable in the near term,"
BNP Paribas strategists wrote in a client note.
"But we emphasize again that previous BOJ asset purchases
have not been successful at weakening the yen on a sustained
basis," they said, adding the recent sharp rise in the dollar
against the yen should reverse in the coming months.
The dollar rose to as high as 82.59 yen on trading platform
EBS, the greenback's highest level against the Japanese currency
since early April, and last traded at 82.49 yen, down 0.1
percent from late U.S. trade on Wednesday.
Shinzo Abe, the leader of Japan's opposition Liberal
Democratic Party, which holds a commanding lead in opinion polls
ahead of the Dec. 16 election, has called for "unlimited" easing
until 2 or 3 percent inflation is achieved, as well as pushing
short-term interest rates below zero.
Such rhetoric from Abe may persist until a new government is
formed and weigh on the yen, said Daisuke Karakama, market
economist at Mizuho Corporate Bank in Tokyo.
"The mood among people outside of Japan is probably that
they don't want to grab the yen right now," Karakama said.
It is hard to come up with reasons to expect a drop in the
dollar against the yen at this point, although the greenback
could retreat if worries about a fiscal crisis in the United
States intensify, he added.
At issue is whether U.S. lawmakers will reach an agreement
to avoid the so-called fiscal cliff of spending cuts and tax
hikes due to take effect in early 2013.
The Australian dollar rose 0.2 percent to $1.0391.
Earlier, it touched an intraday high of $1.0401 on an upbeat
survey of Chinese manufacturing activity.
HSBC's China flash Manufacturing Purchasing Managers Index
rose to a 13-mth high of 50.4 in November, a sign the pace of
growth in Australia's single biggest export market has revived
after a slowdown.
The Aussie dollar rose to as high as 85.78 yen, its
strongest level since early April, and last traded at 85.68 yen
, up 0.2 percent on the day.