* 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 later trimmed its gains, and last traded at 105.96
yen, up 0.1 percent from late U.S. trade on
Wednesday. Against the dollar, the euro edged up 0.2 percent to
$1.2849, up a full cent from the previous day's low near
The yen dipped to its lowest level since April against a
number of currencies, including the dollar and the
The U.S. dollar has climbed roughly 3.9 percent against the
yen in the last seven trading sessions, with the yen weakened
by market expectations that the likely next Japanese government
would push the Bank of Japan to implement more drastic monetary
Shinzo Abe, the leader of Japan's opposition Liberal
Democratic Party, which holds a commanding lead in opinion polls
ahead of an election on Dec. 16, has called for "unlimited"
easing until 2 or 3 percent inflation is achieved, as well as
pushing short-term interest rates below zero.
Analysts say the yen's weakness could persist going into the
election next month.
"Obviously it's based on the fact that if Abe wins, it's all
going to be further easing and further measures to weaken the
yen," said Andrew Robinson, FX analyst for Saxo Capital Markets
in Singapore. "I think we have a bit further to go."
The dollar rose to as high as 82.59 yen, the greenback's
highest level against the Japanese currency since early April,
and last traded at 82.46 yen, down 0.1 percent from late U.S.
trade on Wednesday.
"The mood among people outside of Japan is probably that
they don't want to grab the yen right now," said, Daisuke
Karakama, market economist for Mizuho Corporate Bank in Tokyo.
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.
Optimism on the U.S. budget front has grown after leading
U.S. legislators recently expressed confidence that they could
reach a deal to avert the so-called fiscal cliff of spending
cuts and tax hikes due to take effect in early 2013.
For now, traders said there was talk of dollar offers in the
82.80 yen to 83.00 yen area, with one trader citing talk of
profit-taking interest at levels near 82.80 yen.
The Australian dollar rose 0.2 percent to $1.0386.
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 stood at 85.61 yen
, up 0.1 percent on the day.