Yen extends drop in Asia

The yen hit a six-month low against the dollar on Wednesday, as Japanese importers and offshore players sold the currency, bringing it closer to testing a key technical level. The yen extended its losses in the wake of the Bank of Japan's surprise monetary easing last week, with the dollar rising above 80.00 yen for the first time since August 2011, when the greenback rose to as high as 80.25 yen.
"There has been constant dollar buying recently from Japanese importers," said a trader for a Japanese bank in Singapore, adding that such flows as well as dollar buying by offshore players helped pushed dollar/yen higher on Wednesday. The dollar rose 0.4 percent to 80.04 yen, having risen to as high as around 80.08 yen at one point on trading platform EBS. Traders said dollar-selling orders from Japanese exporters helped to curb the dollar's rise.
The yen also retreated on the crosses, with the Australian dollar climbing 0.5 percent to 85.35 yen and the euro rising 0.4 percent to 105.96 yen. The dollar has risen roughly 5 percent against the yen so far in February, putting it on track for its biggest monthly percentage gain since March 2010.
In addition to the BoJ's monetary easing, the yen has come under pressure this month after data showed that Japan's current account surplus - a major and constant support for the yen - fell to a 15-year low last year.
The dollar has not managed to stay above the weekly Ichimoku cloud for any sustained period since mid-2007, and a breach of that resistance could give the dollar additional momentum against the yen. The dollar has clawed above the bottom of the cloud at 79.73 yen, and faces more resistance at the cloud top, which comes in at 80.94 this week.
Although the euro rose against the yen, the single currency struggled to make headway against the dollar, having retreated from near two-week highs hit the previous day as optimism over the long-awaited Greek bailout deal quickly gave way to concerns about economic growth and implementation risks. The euro held steady from late US trade on Tuesday at $1.3239, down from Tuesday's high of $1.3293, which was the euro's highest level since February 9. It faces resistance at $1.3308, the 100-day moving average.
"The euro had priced in a lot of the good news, in the sense that it had priced in already some form of agreement," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong. The Australian dollar edged up 0.1 percent to $1.0671, but still remained more than a full cent below this week's high of $1.0817.