Yen retreats from record peak in New York

The yen edged off a record high against the dollar on Thursday ahead of a conference call by Group of Seven finance ministers on fears officials may soon intervene to rein in the currency's rapid rise. The dollar hit a record low of 76.25 yen on trading platform EBS. Asian trading began after a break of the previous record low of 79.75 triggered a cascade of automatic "sell" orders. The dollar later bounced back to hover around 79 yen.
G7 finance officials will hold talks via conference call from around 6 pm (2200 GMT), and traders said the market may trim lingering yen longs shortly before that, which could push the dollar toward its session peak around 79.75 yen. A Dow Jones news report quoted an unnamed source as saying Japan's ministry was "ready for battle" on the yen. A G7 source said G7 nations are not expected to agree firm policy action but will offer solidarity to Japan and review its plight.
"We believe that unilateral intervention with the approval of the G7 is likely following tonight's meeting and that joint intervention or a one off co-ordinated response is possible," said Sara Yates, currency strategist at Barclays Capital in London. The yen has seen steady buying since last week's earthquake, as Japanese and international investors closed long positions in higher-yielding, riskier assets such as the Australian dollar, funded by cheap borrowing in the Japanese currency.
Expectations that Japanese insurers and companies will start bringing money home to pay for claims and reconstruction may also have helped boost the yen. Japan's finance minister, Yoshihiko Noda, blamed speculation for the yen spike and said he was closely watching markets, a warning that authorities may soon buy dollars. See and some retail margin traders. The latter were cited as a main factor behind the earlier plunge, with the speed of the decline - the dollar shed more than three yen in about 20 minutes - forcing them to dump trades financed with borrowed yen.
The euro hit a 2011 high of $1.40534 on EBS after solid demand at a Spanish bond auction and on the view that euro zone interest rates were likely to rise soon. It was last up 0.9 percent at $1.4025. The dollar fell to a record low of 0.8852 Swiss francs before bouncing back above 0.90 francs. While the Swiss central bank kept interest rates steady, the franc got a bid from investors who see it as a safe port in a storm.