* Abe says BOJ should consider maximising employment as
* BOJ's easing stance contrasts with no easing sign from ECB
* Japan Nov current account deficit larger than expected
* Dollar/yen up 0.2 pct, hit high of 89.35 yen
* Euro/dollar near 8 1/2-month peak after ECB
By Hideyuki Sano
TOKYO, Jan 11 The yen slid to 2 1/2-year lows on
Friday after Japanese Prime Minister Shinzo Abe said the Bank of
Japan should consider maximising employment as a policy goal on
top of its current price stability mandate.
Abe's comments, made in an interview with the Nikkei
newspaper published on Friday, put renewed pressure on the yen
as having a dual mandate, similar to the U.S. Federal Reserve's,
could make the BOJ undertake more aggressive easing.
The dollar rose to as high as 89.35 yen, its
strongest since June 2010, before giving up some of its gains to
trade at 88.90 yen, still up 0.2 percent from late U.S. levels.
Data showed Japan posted a current account deficit of 222.4
billion yen ($2.5 billion) in November. It was the first deficit
in 10 months and far larger than economists' median forecast of
an almost negligible deficit of 3.5 billion yen ($39 million).
"The data shows Japan's trade balance is hit by slow trade
with China since September (after a territorial dispute that
sparked anti-Japan riots.) Deficit in the current account is
likely to continue in the next couple of months given its
seasonal pattern," said Ayako Sera, market economist at Sumitomo
Mitsui Trust Bank.
The dollar's gain accelerated after a break of the 88.50
option barrier triggered short-covering in thin early Wellington
"Short-term players who had earlier taken profits are now
re-entering. A rise above 90 is within sight now," said a trader
at a Japanese bank.
The euro also climbed to 118.58 yen, a high last
seen in May 2011, and last stood at 117.79 yen, slightly above
late U.S. levels.
The yen has been tumbling since November on speculation of
more easing from the BOJ, with traders expecting the central
bank to adopt an explicit two percent inflation target at its
policy meeting on Jan. 21-22 to fall in line with the aims of
the Liberal Democrat Party-led government elected last month.
The BOJ's deepening bias for easing was in stark contrast to
other major central banks.
Minutes of the U.S. Federal Reserve's last policy meeting
published last week showed some officials at the bank are
concerned about potential side effects of stimulus.
And on Thursday, European Central Bank President Mario
Draghi gave no indication it would cut rates in the near future,
disappointing euro bears who had thought the ECB would be
inclined to cut rates to shore up the wobbly euro zone economy.
As a result the euro jumped 1.6 percent on Thursday, its
biggest daily gain in five months and held little changed from
late U.S. levels at $1.3252.
The single currency is not far from 8 1/2-month peak of
$1.33085 hit last month.
The euro was also bolstered by solid demand at a sale of
mostly two-year Spanish debt, which caused Spain's benchmark
10-year bond yields to fall to a 10-month low.
The British pound, hurt by a string of weak economic data in
recent days, also rebounded sharply on Thursday after the Bank
of England left interest rates and its quantitative easing
The pound stood at $1.6155, maintaining its 0.8
percent gain on Thursday.
The Australian dollar clung near a four-month high hit on
Thursday after strong Chinese trade data. The Aussie unit
fetched $1.0586, near Thursday's high of $1.0599.