Yen slides in Asia

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Against the dollar, the Japanese unit tumbled as low as 85,87, its weakest since September 2010.
It also lost ground against the euro at 113,55 yen from 113,19 yen in US trading, while the European single currency was slightly down against the dollar at US$1,3228 from US$1,3230.

Dai Sato, senior vice president of foreign exchange at Mizuho Corporate Bank, told Dow Jones Newswires that it would “not be surprising” if the dollar climbed above the 86 yen level in yesterday’s session.

The dollar hit a postwar low of 75,32 yen late last year as markets turned to the Japanese currency as a safe-haven from turmoil in debt-hit Europe and a slowing global economy.

The yen’s recent weakness gave Tokyo’s benchmark Nikkei 225 a lift yesterday with the index jumping to its highest levels since last year’s quake-tsunami disaster. Central bank easing — a key plank of the new government’s plans — tends to weigh on the yen, while a weaker currency is good news for Japanese stocks as it makes exporters’ products more competitive overseas.

Speculation was rife that the Bank of Japan would launch more easing measures as Japan’s new Prime Minister Shinzo Abe and his Liberal Democratic Party swept to power on promises to fix the economy with big government spending and to pressure the central bank for more aggressive policy action. — AFP.