Investing.com - The yen fell to fresh seven year lows against the broadly stronger dollar on Thursday as investors looked ahead to the outcome of European Central Bank’s monthly meeting later in the day and Friday’s U.S. nonfarm payrolls report.
USD/JPY was up 0.12% to 119.94, after touching highs of 119.98 earlier in the session, the highest level since July 26, 2007.
The yen came under renewed selling pressure after Japanese media outlets reported that Prime Minister Shinzo Abe's coalition government could retain its majority in the lower house of parliament in elections due to be held on December 14.
Abe dissolved parliament earlier this month, clearing the way for elections to seek a fresh mandate for his economic policies, which call for a weaker yen. The decision came after Japan’s economy unexpectedly fell into recession in the third quarter.
The yen has weakened broadly since the Bank of Japan unexpectedly expanded its stimulus program in late October. In contrast, the Federal Reserve wound up its asset purchase program in October and is expected to start raising interest rates around September 2015.
The yen was slightly lower against the euro, with EUR/JPY easing up 0.16% to 147.70.
Elsewhere, the single currency was at two year lows against the dollar amid heightened expectations for additional stimulus measures from the ECB.
EUR/USD hit lows of 1.2295, the weakest since August 20, 2012 and was last at 1.2315.
Persistently low levels of inflation and a faltering economic recovery have added to pressure on the ECB to step up measures to spur growth. The bank was expected to stop short of announcing quantitative easing measures but could extend its program of asset purchases.
Surveys of euro zone private sector activity on Wednesday indicated that the region would post only marginal economic growth in the fourth quarter.
Meanwhile, the US dollar index, which measures the greenback against a basket of six major currencies, was steady at five-and-a-half year highs of 88.99.