* Abe to be sworn in Wed, to select allies for cabinet
* BOJ minutes show some called for action if econ worsens
By Lisa Twaronite
TOKYO, Dec 26 The yen sank to a 20-month low in
Asian trading on Wednesday, as Shinzo Abe prepared to assume
Japan's helm with a mandate to weaken its currency and push for
more drastic monetary and fiscal stimulus.
Overall activity was thin, after most global financial
centres were closed for the Christmas holiday. All G10 markets
except Japan were closed on Tuesday, and only Japanese and U.S.
markets were to open on Wednesday.
The dollar rose as high as 85.38 yen on the EBS
trading platform, its highest since April 2011, and last stood
at 85.27 yen. Resistance is seen at its April 2011 nadir of
Abe, whose party won a landslide victory in a Dec. 16
election, will be sworn in as premier on Wednesday, and is
expected to pick a slate of close allies to serve in his
On Tuesday, he reiterated that he seeks to tame the strong
yen to help revive Japan's economy.
"There is no reason to expect the trend to change anytime
soon, with no incentive to buy the yen now," said Kimihiko
Tomita, head of foreign exchange for State Street Global Markets
"Of course, on an intraday basis, there could be spells of
profit-taking, but overall, there is no compelling reason that
would make it necessary to buy the yen," he said.
Abe has also called for aggressive monetary easing by the
Bank of Japan combined with massive fiscal spending.
Minutes of the BOJ's November policy meeting released on
Wednesday revealed that some board members said the bank must
act decisively, without ruling out any policy options, if the
outlook for the economy and prices worsens further.
Ongoing concerns about the U.S. budget impasse continued to
underpin the U.S currency.
The next session of the U.S. Senate was set for Thursday,
but the issues presented by "fiscal cliff" of tax hikes and
spending cuts scheduled to take effect next year were not on the
calendar. The U.S. House of Representatives has nothing on its
schedule this week, but its members have been told they could be
called back on 48 hours notice, making their Thursday return a
The dollar index stood at 79.728, after it
rose as high as 79.780 on Tuesday, its loftiest level since Dec.
The euro traded at $1.3182, nearly unchanged from the
previous session and below its 7 1/2-month high of $1.33085 hit
one week ago.
Against the yen, the euro rose as high as 112.46
yen, approaching its 16-month high of 112.59 yen hit on Dec. 19.
It last stood at 112.42 yen.
With markets in Australia still closed for the holiday, the
Australian dollar did not stray far from recent ranges.
It last stood at $1.0357, matching a one-month low struck on