* Traders say yen falls due to month-end yen selling,
* Yen fall curbed by concern on U.S. fiscal cliff, economy
* BOJ speculation also pared back ahead of election
* Boehner's comments dent budding hopes of U.S. budget deal
* Euro supported by fall in Spanish, Italian bond yields
By Hideyuki Sano
TOKYO, Nov 30 The yen dropped on Friday after
month-end selling from Japanese firms triggered more stop-loss
selling, but concerns about the deadlock over the U.S. "fiscal
cliff" helped to keep it above last week's 7-1/2-month low
versus the dollar.
The euro stayed near a one-month high against the dollar and
hit a seven-month high against the yen, helped by falling
Italian and Spanish bonds yields.
The dollar rose 0.3 percent to 82.36 yen, edging
closer to last week's peak of 82.84 yen.
The dollar was up more than 3 percent this month due to
speculation that the Bank of Japan will come under intense
political pressure to ease monetary policy aggressively if the
opposition Liberal Democratic Party (LDP) wins an election for
the lower house on Dec. 16.
The euro also rose to seven-month high of 107.29 yen
and last stood at 107.13 yen, about 0.6 percent above
the late U.S. levels.
The market showed little reaction to comments from LDP
leader Shinzo Abe that some traders regarded as a softening of
his earlier calls on the BOJ to take radical steps to ease
"Abe seems to be toning down a bit. For now it's hard to
expect him to say something that would further boost speculation
of more easing," said Barclay's Yamamoto.
The yen's fall on Friday, according to Tokyo-based traders,
was due to month-end selling by Japanese companies that
triggered some stop-loss selling.
While many market players see the yen beginning a long-term
downtrend due to the country's trade deficit and chances of more
BOJ easing, in the near term the trend could be slowed by
concerns over the political impasse between Democrats and
Republicans in Washington over how to avert the "fiscal
"If there is no progress in the U.S. debt talks, the dollar
is likely to fall below 82 yen next week," said Masafumi
Yamamoto, chief FX strategist at Barclays in Tokyo, noting
recent U.S. economic data had not been as solid as before.
U.S. economic growth in July-Sept was revised up to 2.7
percent on Thursday from the initial reading of 2.0 percent
growth, but the revision was boosted by restocking by
businesses, while consumer and business spending, more direct
gauges of the economy, were revised lower.
While opinion polls show Abe is likely to emerge as Japan's
next prime minister, some of his ideas for radical easing did
not appear in the LDP party manifesto, having already drawn
criticism from other policymakers and some business leaders.
"I think the Abe story has gone a bit too far," said
Yunosuke Ikeda, senior currency analyst at Nomura Securities.
"Support for Abe may not grow much. And if he does not have a
sweeping victory, investors will have to review their scenario."
The euro stood near one-month high of $1.3015 hit on
Thursday, changing hands at $1.2995, up slightly from
late New York levels.
The euro has also been helped by fall in Spanish and Italian
bond yields in recent weeks, as well as relief after Greece's
international lenders agreed on an aid deal for Athens earlier
The 10-year Italian bond yield hit a two-year
low on Thursday, while its Spanish peer fell to
its lowest level since March.
An unexpected improvement in the euro zone's business mood
published on Thursday also bolstered the euro, though market
players think the euro zone economy, already in recession, will
continue to struggle.