The yen hit an 11-month low against the euro and neared a six-month trough versus the dollar on Friday and was seen poised for more weakness due to widening yield differentials and concerns Japan's exports may drop after last month's earthquake. The euro climbed against the yen and touched a 15-month peak against the dollar, supported by market expectations that the European Central Bank will raise interest rates further in coming months after a rate rise on Thursday.
Other than its rise against the yen, the dollar came under broad selling pressure, sliding to a fresh 29-year low against the Australian dollar, a record trough versus the Singapore dollar, and a 16-month low against a basket of currencies. "The dollar and yen are coming under pressure as investors are more comfortable with risk," said Christopher Gothard, head of FX for Brown Brothers Harriman in Hong Kong.
The euro rose 0.7 percent to 122.48 yen, having touched an 11-month high of 122.630 yen on trading platform EBS. The euro poked above resistance near 122 yen on the weekly Ichimoku chart, a form of Japanese technical analysis widely used by market players. A buy signal would be confirmed it the euro finishes the day above that resistance.
The euro rose 0.6 percent to $1.4387, having touched a 15-month high of $1.4405 earlier in the day. The euro's rise has extended following its breach this week of resistance near $1.4283, its November high and roughly where it faced trendline resistance drawn from its July 2008 record high. The yen has slid broadly over the past couple of weeks, having sharply reversed course after surging to a post-World War Two record high of 76.25 to the dollar on March 17.
That rise in the yen prompted the G7 to intervene jointly to sell the yen and led to the yen's subsequent fall. That shifted investors' focus to interest rate differentials and the appeal of carry trades - a tactic of selling low-yielding currencies to fund investment in currencies with higher yields. There was some talk earlier on Friday of yen-selling against the euro by Japanese brokerages, although others said the move was fuelled by overseas players with stop-loss of the euro having added fuel to its rise against the yen.
The dollar rose 0.3 percent against the yen to 85.131 yen, nearing a six-month high of 85.530 yen hit earlier this week. Except for its rise against the yen, the dollar was mostly weaker, with the Australian dollar hitting a fresh 29-year high of $1.0535, and the Singapore dollar vaulting to a record high against the greenback . The dollar index fell to its lowest since December 2009 at one point.