The yen dominated currency markets on Friday, extending its gains against the euro and US dollar as trading wound down ahead of a long weekend that will keep US financial markets closed tomorrow.
Otherwise, the dollar exited the week on a strong note, advancing against the euro, British pound and Swiss franc.
The yen's rally took on a fresh lease of life this week, when senior officials from the Group of Seven industrialized nations talked about the need for Asian currencies to take more of the burden of dollar weakness.
The euro fell below its late November nadir of ¥134.03, hitting a session bottom at ¥133.36. The single currency had hit a record high of ¥141.64 on Dec. 29. The dollar also slipped as far as ¥101.81, about a five-year low.
Price movements may have been exacerbated by last-minute positioning ahead of the US national holiday in observance of the birthday of Martin Luther King Jr on Jan. 17.
Late afternoon, the euro was at ¥133.60, dropping from ¥135.39 late Thursday. The single currency was at US$1.3107 from US$1.3204 late Thursday. The US dollar was at ¥101.95 from ¥102.51 and at 1.1810 Swiss francs from SF1.1671. The pound was at US$1.8701 from US$1.8816.
The yen has been rising versus the euro since the start of the year, as traders unwound long positions in the euro versus the yen built up as the euro lifted to its Dec. 29 record.
The remarks from G7 officials were particularly significant ahead of the Feb. 4 G7 meeting, which China has confirmed it will attend. The market took the comments to mean the G7 will press the Asian giant hard to make some kind of change to the yuan's effective peg to the dollar.
The pressure boosted the yen because most analysts believe the Japanese currency will rise if the yuan is revalued. That's because investors believe a stronger yuan will make Japanese authorities less concerned about the impact on local exporters of an appreciating yen and therefore less likely to intervene.
The remarks also came as Japanese officials remained confident on the economy's ability to grow this year, despite some sluggish recent data.