* Traders cite large-lot selling in cross/yen
* Euro/yen hits 1-yr low, Japan exporters seen as trigger
* Talk of hedge fund selling and margin trader offers
* Cross/yen drop gains steam due to stop-loss selling
By Masayuki Kitano
TOKYO, Feb 25 (Reuters) - The euro slid to a one-year low
against the yen on Thursday, hurt by persistent worries about
Greece's fiscal woes, a flurry of selling by Japanese names as
well as stop-loss offers.
Worries about a possible downgrade of Greece weighed, with
Standard and Poor's saying on Wednesday it may cut Greece's BBB+
rating by one or two notches within a month. []
But the euro's slide was driven mostly by flows. Selling of
the euro against the yen by Japanese exporters provided the
initial trigger for the fall, traders said.
The euro's drop later gained steam on stop-loss orders, as
well as yen-buying by hedge funds and Japanese retail margin
traders, they said.
"The timing is unexpected, almost like getting hit by a raid
at night," said Tokichi Ito, deputy general manager for Trust &
Custody Services Bank's forex team, adding that the euro's fall
against the yen on Thursday did not seem to be in reaction to any
particular piece of news.
"It's as if a rock started slowly rolling down a hill and now
it can't stop rolling," Ito said.
The next downside target for the euro is likely to be 120.00
yen, and if that goes, the euro may even head towards the January
2009 low of 112.08 yen, which was the lowest since 2002, he
added.
A trader for a major Japanese bank said there was some
large-lot selling in cross/yen from Japanese names. Another
trader cited talk of cross/yen selling by retail margin traders.
The euro hit a one-year low of 120.62 yen on trading platform
EBS. After trimming some losses it stood at 120.71 yen, down 1.1
percent on the day.
Traders said the euro's slide picked up pace after triggering
stops below the previous day's intraday low of 121.61 yen.
The yen surged broadly, with sterling dropping to 137.35 yen
<GBPJPY=R>, its lowest since March 2009. The dollar fell 0.6
percent to 89.59 yen <JPY=>.
Against the dollar, the euro fell 0.5 percent to $1.3477
<EUR=>, edging back towards a nine-month low of $1.3443 hit last
week.
The euro had eked out gains against the dollar the previous
day after Federal Reserve Chairman Ben Bernanke told Congress a
weak jobs market and low inflation would likely allow the Fed to
keep rates low for "an extented period".
That poured cold water on market expectations that U.S. rates
would rise sooner rather than later -- a view that got a boost
after the Fed raised its discount rate last week.
(Additional reporting by Yoko Matsudaira, Kaori Kaneko and Rika
Otsuka; Editing by Joseph Radford)
