* Dollar hits seven-month high vs yen on BoJ speculation
* Euro hits 6-1/2-month high versus yen
* Euro pressured after Moody’s cuts French credit rating
* Euro-zone finance ministers meet to discuss Greek aid
By Daniel Bases and Julie Haviv
NEW YORK, Nov 20 (Reuters) - The yen slid to seven-month lows against the U.S. dollar on Tuesday and fell nearly as low against the euro on expectations that Japan’s central bank will be pushed to move aggressively to try to weaken the yen with looser monetary policy.
The euro slipped against the greenback after a downgrade of France’s sovereign credit rating late on Monday, which had been expected, undercut optimism that euro-zone ministers would release funds needed for Greece to pay its debt.
U.S. Federal Reserve Chairman Ben Bernanke maintained his guidance that U.S. monetary policy would stay loose with interest rates near zero until at least mid-2015. He offered few clues, however, on how the Fed might tweak its bond-purchase program at the start of next year in its effort to spur more borrowing at low interest rates.
The U.S. dollar was up for a fifth consecutive session against the yen, rising 2.42 percent so far in November. This is a reflection of expectations that elections on Dec. 16 will return a new government in Tokyo, one that could push the Bank of Japan toward more dramatic monetary stimulus.
The dollar rose to 81.75 yen, its highest level since April 20. It last traded at 81.66, up 0.32 percent for the day, according to Reuters data.
The euro hit a peak of 104.77 yen, its highest point since May 4. It last traded at 104.69, up 0.37 percent for the day.
“The whole political situation in Japan, that safe-haven status is rather questionable at this point,” said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut.
Kim referred to the long-time strategy of borrowing yen to either park cash, given its stability, or use it as a funding currency to buy higher-yielding currencies and assets.
“And even if Bernanke comes out saying we are going to potentially buy more assets, it is interesting how dollar/yen is still holding up pretty well,” Kim said.
The BOJ left interest rates unchanged at its latest policy meeting earlier on Tuesday, as expected.
Shinzo Abe, the leader of Japan’s opposition Liberal Democratic Party and a frontrunner to win the election, has been pushing hard for more aggressive BOJ moves on easing monetary policy.
U.S. housing data gave the greenback some underpinning.
The U.S. Commerce Department reported housing starts rose to their highest rate in more than four years in October. The data followed robust reports on Monday on existing-home sales and home builder sentiment.
The euro, meanwhile, was flat against the dollar as investors fixated on a euro-zone finance ministers’ meeting on Tuesday.
The finance ministers are likely to approve the next tranche of loans to Greece although the money is unlikely to be disbursed before December and a deal on debt reduction may need further talks.
“Comments heading into today’s meeting are generally hopeful, and even if a formal decision to release funds is not reached today, ministers could reach a consensus on the key parameters of any deal,” said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.
“Accordingly, we see the euro-zone finance ministers meeting as a market-positive rather than market-negative event, with some potential for the euro and other foreign currencies to move higher today.”
The euro last traded at $1.2818, up slightly after paring earlier losses following the credit downgrade of France from Aaa status late on Monday by Moody’s Investors Service.
Some analysts said the cut did not come as a surprise after Standard & Poor’s downgraded France in January, and the finance ministers’ meeting could have a bigger impact on the euro if policymakers fail to meet market expectations.
“The main driver in terms of the news flow was the downgrade of France overnight, but the knee-jerk reaction we saw overnight was very short-lived,” said Michael Sneyd, FX strategist at BNP Paribas.
“That tells us the downgrade was not a surprise ... The focus today is the Eurogroup meeting, and there we are looking for some reasonable progress to be made for Greece’s next aid tranche.”
He said he was looking for progress on Greece to help the euro consolidate above $1.28, adding it could reach $1.30 if Congress and the White House agree to a deficit-reduction deal by the end of the year to avert $600 billion of tax hikes and spending cuts, dubbed the “fiscal cliff.”
The dollar, however, should benefit if the United States hits the fiscal cliff because of its status as a safe-haven currency.