Investing.com - The Japanese yen continued to plunge in Asian trade Thursday after newly elected Prime Minister Shinzo Abe step up his weaker yen rhetoric aimed at encouraging the Bank of Japan to depress the currency.
In Asian trading Thursday, USD/JPY surged 0.16% to 85.78 after the pair soared 0.58% to hit 85.37, the strongest level since September 2010, during Wednesday's U.S. session. Japanese Prime Minister Shinzo Abe promised that his new government will take bold steps to ensure the yen weakens.
Elshwere, EUR/JPY surged 0.33% to 113.66 while GBP/JPY added 0.2% to 138.46. The yen is hovering near 16-month lows against the euro.
Abe made weaker yen rhetoric a cornerstone of his campaign and some traders believe that with his Liberal Democratic Party sweeping to a convincing majority in Japan's lower house of parliament in the most recent Japanese elections that Abe has the mandate needed to force the Bank of Japan to engage in unlimited monetary easing.
For his part, Abe has not been shy about threatening to revoke a Japanese law guaranteeing the Bank of Japan's independence and replacing BoJ governor's if they do not align easing and inflation targets with Abe's.
Spot yen prices are off about 10% this year, putting the Japanese currency in position to be the worst performer among the world's developed market currencies in 2012.
Abe has promised to make weakening the yen and engineering reflation his top economic priorities in an effort to bolster the world's third-largest economy.
Traders appear to be liking what they are hearing from Abe as the yen was seen broadly weaker against the major currencies on Thursday as well. CAD/JPY climbed 0.35% to 86.44 while CHF/JPY added 0.32% to 94.06.
Perhaps surprisingly, AUD/JPY was higher by just 0.07% at 88.94 while NZD/JPY jumped 0.33% to 70.42.
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