FOREX -Yen skids to 6-month low vs dollar, 4-year low vs euro

Monday, 25 Nov 2013 | 12:34 AM ET

* Net short positions in yen climb to 6-year high in latest data

AUD also under pressure, still pressured by RBA intervention talk

* Asian markets monitor China/Japan tensions, Iran developments

By Lisa Twaronite and Ian Chua

TOKYO/SYDNEY, Nov 25 (Reuters) - The dollar rose to a six-month high and the euro pushed to a new four-year peak against the yen in Asian trading on Monday, as investors positioned for yen weakness after speculators had bet on further yen declines.

Positioning data last week showed currency speculators increased net short positions in the Japanese currency to the most in six years, reflecting a belief the Bank of Japan will stay the most aggressive in maintaining its massive stimulus program among major central banks.

"Stops were triggered in dollar/yen, which triggered stops in euro/yen," said Bart Wakabayashi, head of forex at State Street Global Markets in Tokyo.

"It does seem a bit overdone," he said, with no specific macroeconomic move to which the jump can be attributed.

Market participants cited the reluctance of some investors to be short dollars ahead of this week's U.S. Thanksgiving holiday on Thursday. Demand was also seen from Japanese importers, as Monday was a "gotobi" date, or a multiple of five on which books are traditionally settled throughout a month.

The euro rose as far as 137.93 yen, its highest since October 2009, and was last up 0.5 percent at 137.89 yen.

The dollar was up 0.7 percent to 101.87 yen after climbing as high as 101.895 yen on the EBS trading platform, barrelling through the July 8 peak of 101.54 yen to its highest level since May 29.

Against the dollar, the euro slipped 0.1 percent to $1.3540 .

European Central Bank Executive board member Benoit Coeure said on Monday on a visit to Tokyo that slowing price growth, or disinflation, in Europe is likely to continue for now, but will not progress to deflation because the economy is recovering and inflation expectations remain anchored at around 2 percent.

ECB Governing Council member Christian Noyer also said on Monday said that European financial markets are stabilising and interest rates are returning to normal levels.

The euro remains above last week's lows hit after a media report suggested the ECB could lower its deposit rate to negative. The report, which had since been played down by the ECB, sent the euro spiralling to a low of $1.3399 from $1.3584.

The Australian dollar retraced Friday's 2-1/2 month low of $0.9139 according to Reuters data, and was last at $0.9144, down about 0.2 percent on the day and still pressured by the threat of intervention from Reserve Bank of Australia Governor Glenn Stevens.

Stevens last Thursday said the central bank was "open-minded" about intervention to weaken the currency, having consistently argued the Aussie dollar was overvalued compared with fundamentals.

The Aussie slid 2.1 percent last week. Immediate support is seen around $0.9097, the 76.4 percent retracement of its August to October rally.

Traders said the commodity currency could continue to struggle particularly if tensions between China and Japan grew.

China at the weekend suddenly imposed new rules on airspace over islands at the heart of a territorial dispute with Tokyo, prompting Japan and ally the United States to warn of an escalation into the "unexpected" if Beijing enforces the rules.

However, news of a breakthrough that curbed Iran's nuclear activity could help offset any potential fallout from renewed China/Japan tension.

Iran and six world powers clinched a deal on Sunday to curb the Iranian nuclear programme in exchange for initial sanctions relief.