Reuters – The dollar hit a seven-month low against the yen on Monday, extending a slide as the Federal Reserve appears set to soon end a two-year run of credit tightening that had widened the U.S.currency’s yield advantage.
A renewed focus on U.S. deficits after last month’s meeting of Group of Seven industrialised powers, worries about Iran’s nuclear ambitions and deteriorating technical signals have also helped drive the dollar to one-year lows against the euro.
The yen gained across the board on solid buying by hedge funds and investment banks, while some Japanese players squared positions heading into the country’s Golden Week holidays on Wednesday through Friday.
“Most Japanese are going into the Golden Week holidays, so they probably want to lighten up their positions a bit,” said a senior trader at a U.S. investment bank.
