By Antoni Slodkowski TOKYO, Oct 27 (Reuters) - The euro hit a seven-week high on Thursday after EU leaders and banks reached a deal on a 50 percent writedown for private bondholders on their Greek debt and made progress in other areas crucial to stemming the debt crisis. The euro jumped 0.6 percent to $1.4000 , breaking through a wall of orders and charging past stop-loss points on the way, also bolstered by the EU's progress on bank recapitalisation and its move to scale up the size of the euro zone's 440 billion euro ($600 billion) bailout fund, the EFSF. Under the deal, the private sector agreed to voluntarily accept a nominal 50 percent loss on its bond investments to reduce Greece's debt burden by 100 billion euros, cutting its debt to 120 percent of GDP by 2020 from 160 percent now. While the final summit statement fell short of the detailed "comprehensive plan" many had hoped for, the leaders made enough progress to spark a relief rally across battered riskier assets. The euro zone's rescue fund will be leveraged four or five times to about 1 trillion euros, but EU finance ministers are not expected to agree until November on the nitty-gritty elements of how the scaled up EFSF, or European Financial Stability Facility, will work. "The devil is in the details here ... we don't actually know how they are planning to increase the bailout fund size from 440 billion euros to a trillion. On top of that, there are some questions as to whether 1 trillion euros in itself is enough," said Damien Boey, an equity strategist at Credit Suisse in Sydney. The euro's rally stalled at $1.4, around the level where an option barrier was rumoured to be placed, ahead of stop losses lurking at $1.4010-20 and resistance at $1.4013, a 61.8 percent retracement of its August-October decline. Against the yen, the euro was 0.4 percent higher at 106.25 yen . NEARING RECORD LOWS The dollar zeroed in on a record low against the yen after the Bank of Japan, as widely expected, decided to ease policy by expanding asset purchases by 5 trillion yen ($65.8 billion), to 20 trillion yen. The dollar dipped 0.3 percent to 75.95 yen , a stone's throw from the record low of 75.71 yen plumbed the day before. That was because some funds which went dollar long, expecting that Tokyo would deliver a "double punch" of easing and intervention at the same time, started dumping positions. "This (BOJ step) was very predictable and foreign investors may be disappointed that the BOJ didn't deliver something extra. They may buy back the yen in London trading hours," said a senior trader for Japanese bank. "Retail and interbank dealers are still sticking to their (dollar/yen) longs, and unless we have intervention will probably wait for London time to fully unwind them," he said predicting the pair's deeper fall outside Asian trade. Traders also cited talk of an option barrier at 75.50 yen and a bigger one at 75.00 yen. Traders also warned of chunky stop-loss dollar offers at 75.00 yen. The move in the euro and other risk currencies saw the dollar index hit a new seven-week low of 75.757, down from an overnight high of 76.662. The index has been on a downtrend in the past few weeks. "A dovish Fed, easing in dollar funding/liquidity conditions, OK corporate earnings from any company that earns revenue abroad, and fading fears of crisis as we await decent Q3 GDP data, all make for a fundamentally bearish dollar outlook," said Kit Juckes, a strategist at Societe Generale.

Source