The yen jumped to a 15-year peak against the dollar on Tuesday on fears the global economy is slowing, testing Japanese authorities' resolve to stem the currency's climb. The yen's rise accelerated as stop-loss sales were triggered in euro/yen at around 107 yen after the Japanese currency hit a nine-year high versus the euro. Traders cited macro hedge-fund selling of the euro against the dollar.
The US dollar briefly pared losses against the yen after the Nikkei business daily reported the Bank of Japan is considering additional steps to loosen monetary policy. Japan's Ministry of Finance may consider unilateral yen-selling market interventions if speculators drive up the currency, the paper said. Japanese Finance Minister Yoshihiko Noda declined to comment on the chance of currency intervention, saying only that recent currency moves were one-sided and disorderly moves could harm the stability of the economy and financial system.
The greenback was last trading down 1.1 percent against the yen at 84.18 yen after going to a 15-year low of 83.61, according to Reuters data. It fell to 83.58 yen on electronic trading platform EBS. Dollar selling accelerated after a report showed sales of previously owned US homes fell to their slowest pace in 15 years during July.
The euro traded as low as 105.45 yen according to Reuters data and 105.44 on EBS, its lowest since 2001. It was last at 106.66 yen, down 0.9 percent on the day. Technical analysts say the euro could be poised for a fall toward 105.00 yen though on Tuesday it bounced off interim support at 105.50 yen, around the low from September 2001.
Against the dollar, the single currency rebounded from a six-week low after the housing data to trade up 0.1 percent at $1.2671 with a session peak of $1.2718. The euro fell to its lowest against the Swiss franc on Tuesday since the euro's launch in 1999 amid safe haven buying of the Swiss currency. The euro was down 0.8 percent against the Swiss currency at 1.3067 francs after going as low as 1.3050 francs, according to Reuters data. The low on electronic trading platform EBS was 1.3049 francs.
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