* Euro/yen hits highest level since April 2010
* Dollar/yen hits strongest level since June 2010
* Euro hits 14-month high vs dollar
* Aussie sags after China official PMI
* U.S. payrolls data next in focus
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, Feb 1 The yen slid to its
lowest level in more than 2-1/2 years against both the dollar
and the euro on Friday, pressured by expectations of more
aggressive monetary easing from the Bank of Japan.
Supported by diminishing worries about Europe's debt crisis,
the euro hit a 14-month high against the dollar, gaining added
momentum after breaching an option barrier.
The dollar rose 0.6 percent to 92.17 yen, having hit
a high of 92.27 yen earlier on trading platform EBS, the
greenback's strongest level since June 2010.
The euro jumped 0.9 percent to 125.53 yen. The
single currency scaled a peak of 125.75 yen, its highest level
versus the Japanese currency since April 2010.
The yen's drop accelerated as market players took aim at and
breached option barriers at levels such as 125.00 yen versus the
euro and 92.00 yen against the dollar, traders said.
Selling the yen has become a one-way bet with Japanese Prime
Minister Shinzo Abe heaping relentless pressure on the BOJ to
ease monetary policy aggressively to jolt the economy out of a
decade long malaise.
Analysts expect further weakness in the yen with some
expecting the dollar to rise to 100 yen in time.
"We expect sustained weakness in the yen because of Abe's
aggressive policy changes," Michael Sneyd, analyst at BNP
Paribas, wrote in a client note. He sees the dollar reaching 95
yen in the first quarter of this year.
In contrast, worries about Europe's debt crisis are slowly
easing and the European Central Bank's relatively more upbeat
outlook for the region have made the euro more attractive
against the yen and dollar.
"BIG SENTIMENT CHANGE"
The euro rose 0.3 percent to $1.3619. The single
currency climbed to $1.3634 earlier on Friday, its strongest
level against the dollar since November 2011.
"Euro goes up every day .... It's all just a continuation of
what we've been seeing lately. Same kind of portfolio shift, the
sentiment is positive," said Jesper Bargmann, Asia head of G11
spot FX for RBS in Singapore.
"Money is going back into Europe... So we're seeing the
longer-term investors leaving the safe haven bets, particularly
the yen, but we've seen it in sterling as well, we've seen it in
Swiss franc," Bargmann said.
"It's a big sentiment change more than anything else," he
The Australian dollar slipped 0.3 percent to $1.0399
, coming under pressure after China's official measure
of manufacturing activity surprised on the downside.
HSBC's reading of Chinese manufacturing
activity, however, hit a two-year high.
All eyes are now on U.S. jobs data due later on Friday.
David Song, currency analyst at DailyFX, said an upbeat
reading could add to the case for the Federal Reserve to slowly
move away from its easing cycle.
"We may see a growing number of Fed officials scale back
their willingness to preserve the highly accommodative policy
stance for a 'considerable time' as the world's largest economy
gets on a more sustainable path," he said.