* Dollar/yen up 0.1 pct, hits above Y94 at one point
* Yen pressured by news BOJ governor stepping down early
* More dovish BOJ governor is expected
* Euro off lows, shrugs off French call for FX target
* Aussie down 0.4 pct after soft retail sales data
By Hideyuki Sano and Ian Chua
TOKYO/SYDNEY, Feb 6 The yen slumped to a 33-month low against the dollar and the euro on Wednesday as investors piled back into the easy one-way trade on viewd that a more dovish Bank of Japan governor will soon be installed to push through aggressive easing measures.
The dollar briefly rose above 94 yen. That breached a key chart point just below that, of a 38.2 percent retracement of its 2007-2012 decline, as the yen extended the rally sparked by the news Bank of Japan Governor Masaaki Shirakawa will step down three weeks earlier before planned.
The euro resumed its uptrend despite a call from French President Francois Hollande to protect the currency from "irrational movements", while the Australian dollar dropped to an 11-week low after soft Australian retail sales data.
The Japanese currency came under renewed pressure after Tuesday Shirakawa announced he will step down on March 19 rather than when his five-year term ends in April.
Prime Minister Shinzo Abe, who has put the BOJ under intense pressure to do more to spur the economy, has made it abundantly clear he wants a governor who will be bolder than the outgoing BOJ chief in loosening monetary policy. Abe is expected to name Shirakawa's successor later this month.
Despite sporadic complaints from some governments such as Germany and South Korea, Abe's support for aggressive easing does not seem to have irked many other countries, making yen selling comfortable, said Minori Uchida, chief currency strategist at the Bank of Tokyo-Mitsubishi UFJ.
"The G20 finance ministers meeting next week is unlikely to discuss currencies much. The market is likely to test further downside on the yen in the near future," Uchida said.
On Wednesday, the dollar and the euro touched fresh 33-month highs at 94.075 yen and 127.695 yen respectively, steadily moving towards their 2010 peaks around 94.99 and 134.37.
The dollar last traded at 93.77 yen, up 0.1 percent from late U.S. levels while the euro fetched 127.18 yen, flat from late U.S. levels.
Bets against the yen were in full gear in the option market as well.
The implied volatility on one-month dollar/yen options rose to above 13 percent, its highest level since August 2011 while risk reversal spread widened to levels not seen in many years in favour of dollar calls.
Rising volatility could encourage foreign investors to hedge against currency swings on their exposure to Japanese shares, which means more selling in the yen, said Hideki Amikura, forex manager at Nomura Trust Bank.
On Wednesday, the single currency also held firm against the dollar. It last stood at $1.3567, down slightly from late U.S. levels but still up sharply from a one-week low of $1.3458 hit on Tuesday.
Spanish and Italian bonds rebounded on Tuesday after a steep selloff in the previous session, easing fears that political uncertainties in these countries could derail the euro zone's efforts to contain its debt crisis.
Also helping to turn the euro higher was a survey on Tuesday showing the euro zone's economy is probably recovering even though it also showed the gulf between the two biggest members has widened, a development that will no doubt worry policymakers.
As the French economy struggles, President Hollande urged the euro zone to set a mid-term target for its currency's exchange rate.
But the market shrugged it off as the idea that appeared to have little support, with Germany opposing intervening on currency markets and
Euro bulls had turned cautious earlier in the week, worried that the European Central Bank might do or say something to weaken the single currency at Thursday's policy meeting.
While the ECB has been relatively upbeat about the outlook for the euro zone, a strengthening euro is unwelcome in a region still largely mired in recession.
"I would like to see how the ECB will change its tone after perhaps it became too bullish in January," said Mitsubishi Bank's Uchida.
Elsewhere, the Aussie crumbled to an 11-week low of $1.0342 after weak local retail sales strengthened the case of further interest rate cuts this year. The last cut was in December.
It last traded at $1.0347,, down 0.4 percent from late U.S. trade.
Sterling saw only partial relief ahead of the Bank of England's own policy meeting on Thursday after having fallen to a fresh 5-1/2 month low of $1.5630 on Tuesday.
Concerns about the economy prompted some marginal talk that the central bank could opt for further quantitative easing to stimulate growth.
The consensus forecast, however, is for the BOE to stand pat. The market is also keenly waiting to hear what incoming BOE Governor Mark Carney says when testifying before a parliamentary committee on Thursday.