The yen rose and was on track for its fourth consecutive monthly advance against the dollar on Tuesday, its longest winning streak in 19 months, as investors shrugged off Japan's latest easing move. Demand for the safe-haven currency rose in the past month as US Treasury yields tumbled amid mounting signs the economic recovery in the United States was faltering.
-- Dollar/yen on track for fourth monthly gain
-- Euro hits record low against Swiss franc
The rapid advance, which pushed the yen to a 15-year high this month, prompted Japanese authorities to announce measures on Monday to curb the yen's strength to protect the country's exports. Traders and analysts saw the central bank's moves as a symbolic gesture that will do little to halt the climb. They said that short of direct intervention in the foreign exchange markets, the yen is bound to test its all-time high of 79.75 yen set in April 1995, according to Reuters data.
Japan last sold yen in the markets to weaken it in March 2004, with mixed results. In late afternoon trading, the dollar was down 0.8 percent at 83.96 yen, not far from its 15-year low of 83.58 set on electronic trading platform EBS last week. The euro fell 0.6 percent to 106.50 yen.
Japanese Finance Minister Yoshihiko Noda repeated on Tuesday that the government would take decisive action on currencies - usually seen as code for intervention - when necessary. The dollar has fallen almost 3 percent against the yen this month and is down more than 9 percent this year. Traders say Japanese authorities are expected to buy the dollar against the yen if the dollar slides 3-4 yen in one day.
The yen could also face potential buyback pressure in cross trades such as euro/yen and Aussie/yen, which have attracted some interest because of their larger yield differentials. Against the dollar, the euro rose 0.2 percent to $1.2684, but it slumped to a record low 1.2850 francs on electronic trading platform EBS.
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