October 21, 2011 / 2:10 PM / 8 years ago

FOREX-Dollar slumps to record low versus yen

* Dollar falls below 76 yen, biggest daily fall since Aug

* France and Germany eye two summits to hammer out deal

* Euro jumps versus dollar, but fall vs other rivals

By Wanfeng Zhou

NEW YORK, Oct 21 (Reuters) - The U.S. dollar slumped to a record low against the yen on Friday in its biggest one-day decline in nearly two months, bringing back into focus the threat of official intervention to weaken the Japanese currency.

Traders reported initial large selling of dollars from a U.K. clearer and macro funds, and losses accelerated after the pair broke through a series of stops around 76.30 and 75.90.

“No specific news. Just general investor impatience with the Bank of Japan’s lack of a yen weakening policy,” said Tommy Molloy, chief dealer at FX Solutions at Saddle River, New Jersey.

Talk that Japanese authorities may follow the footsteps of the Swiss National Bank in putting a floor in dollar/yen had buoyed the currency pair in recent sessions, but investors resumed yen buying after market speculation failed to materialize.

The euro rallied against the dollar, but fell against most other currencies, as doubts persisted that European leaders are able to deliver a solution to the escalating debt crisis soon.

The dollar fell as low as 75.78 yen on trading platform EBS , surpassing its previous record low of 75.941 set in August.

It last traded down 0.9 percent at 76.18 yen, coming off lows on reported buying from Japanese banks at the 76.00 level. At current levels, it was on pace for its biggest daily fall since Aug. 26.

If the yen does hold, it could hit 75.50 per dollar, followed by the 75.00 mark, Molloy said.

The euro last rose 0.8 percent to $1.3883 , recovering from a session low of $1.3703. It had hit as high as $1.3890 on Reuters data.

France and Germany said in a joint statement that European leaders would discuss a solution to the crisis on Sunday, but no decisions would be adopted before a second meeting to be held by Wednesday at the latest.

But the euro dropped 0.1 percent versus the yen to 105.76 . It also slipped 0.1 percent against sterling to 87.15 pence and lost 0.4 percent to 1.2269 Swiss francs .

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