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The yen declined 0.8 per cent to 82.30 per dollar in early New York trading. REUTERS / Truth Leem
The yen declined 0.8 per cent to 82.30 per dollar in early New York trading. REUTERS / Truth Leem

Yen and euro both yield ground to dollar

What's Down:The yen weakened beyond 82 to the US dollar for the first time since April after Japan's exports decreased for a fifth straight month.

The yen weakened beyond 82 to the US dollar for the first time since April after Japan's exports decreased for a fifth straight month, undermining demand for the nation's assets.

The Japanese currency fell to a six-month low versus the euro amid speculation that the winner of next month's election will pressure the Bank of Japan to boost monetary stimulus.

The European single currency fell from the highest level in almost two weeks versus the dollar after finance ministers failed to agree on a debt-reduction package for Greece. The Dollar Index approached an 11-week high amid stronger demand for the safest assets. Sweden's krona advanced against all of its major peers.

"The trade numbers have added to the case for yen weakness," said Sean Callow, a senior currency strategist at Westpac Banking in Sydney.

"The struggles of the Japanese exporters are becoming increasingly clear."

The yen declined 0.8 per cent to 82.30 per dollar in early New York trading, after reaching 82.38, the weakest since April 6.

Japan's currency dropped 0.6 per cent to 105.33 per euro, after touching 105.55, the lowest level since May 4. Europe's shared currency fell 0.1 per cent to $1.28. It rose to $1.283 yesterday, the most since November 7.

The yen slid for a sixth day versus the dollar after the finance ministry said exports fell 6.5 per cent last month from a year earlier, leaving a trade deficit of 549 billion.

The median estimate of economists surveyed by Bloomberg was for a shortfall of 360bn.

The 14-day relative strength index for the dollar against the yen was above 70 for a fourth day, the level that some traders see as a sign an asset is about to change direction.

"Dollar-yen and cross-yen look overbought," said Yoshitsugu Fujita, the assistant vice president of global markets at Sumitomo Mitsui Trust Bank in New York.

"The weak yen trend will reverse in the not-so-distant future."

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