* Yen selling continues, falls to 4-1/2-year low vs dollar * Euro weakens to 5-1/2-week low vs dollar at session trough * Aussie having worst losing streak in 20 years - DailyFX NEW YORK, May 14 (Reuters) - The yen and the euro both fell against the U.S. dollar on Tuesday for a fourth straight session, with the yen touching its lowest level against the dollar in 4-1/2 years, amid signs that the U.S. economy is improving. The yen had been in a downward spiral even before breaching the key mark of 100 yen against the dollar last week, partly as a result of aggressive monetary policy action from the Bank of Japan, as well as expectations that the U.S. Federal Reserve will taper its monthly bond buying sometime this year. "The unprecedented amount of monetary easing in Japan is one factor, the other in the next few months is a deteriorating current account," said Tatjana Michel, director of currency analysis at Charles Schwab in San Francisco of ongoing yen weakness. "Japan exports do better but imports become more expensive." Michel's view is that the yen will weaken to between 110 and 115 to the dollar by year end and decline further to 120 to 130 in 2014. The dollar climbed as high as 102.40 yen on Tuesday, the highest level in 4-1/2 years, and last traded at 102.20 yen, up 0.4 percent on the day. The euro last traded at 132.30 yen, up 0.2 percent on the day. The session peak of 132.77 yen was a near 3-1/2-year high. The extended yen weakness came despite a spike in Japanese government bond yields, which tends to reduce the relative attractiveness of foreign bonds for investors in Japan. The Bank of Japan could further ease monetary policy as early as October if prices do not rise as quickly as projected, according to economists polled by Reuters, who have also upgraded their growth forecasts. But the dollar was underpinned by Monday's data showing U.S. retail sales rose unexpectedly in April, and it may gain further if upcoming U.S. economic data also points to a recovery. U.S. import prices fell in April due to a drop in oil costs, a positive sign for household finances that also indicated benign inflation pressures. U.S. data to be released this week includes industrial production on Wednesday, housing starts and consumer prices on Thursday and consumer sentiment on Friday. EURO STEADY VERSUS DOLLAR The euro swung between gains and losses, with stronger-than-expected euro zone industrial output data offsetting data on investor sentiment in Germany that pointed to a tepid recovery in Europe's largest economy. The euro got a slight boost after Fitch Ratings agency upgraded Greece's sovereign credit rating to B-minus from CCC, with a stable outlook. But the euro remains weighed by the risk that the European Central Bank could slash its deposit rate, paid on the surplus funds that banks park with the ECB, to negative, essentially charging depositors for leaving funds at the ECB. "The euro seesawed after the mixed data from the region largely offset (each other), keeping in place sentiment that's largely bearish," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, D.C. "Expectations that the ECB might further cheapen borrowing rates to spur recovery at a time when the days of the Fed's super-easy monetary policies appear increasingly numbered have been among the chief catalysts driving the euro lower," he said. The ECB clashed with Germany on Tuesday over how quickly the euro zone should complete a system to deal with failing banks. The euro was last down 0.3 percent against the dollar at $1.2943 after touching a 5-1/2-week low of $1.2930, according to Reuters data. The Australian dollar fell for a seventh consecutive trading day, according to Reuters data, and is enduring its worst losing streak in at least 20 years, according to David Rodriguez, quantitative strategist at DailyFX. "Our proprietary retail FX positioning data shows that retail crowds are the most long AUD/USD on record," Rodriguez said. "We most often use this as a contrarian indicator - if crowds are long we want to be short. The severity of the move warns of corrections, but we think overall direction is clear." The Australian dollar was last at US$0.9890, down 0.6 percent.