Forexpros - The U.S. dollar dropped to a seven-week low against the broadly stronger yen on Monday, as fears over the debt crisis in the euro zone intensified, bolstering demand for safe haven assets. USD/JPY hit 77.94 during late Asian trade, the pair’s lowest since June 1; the pair subsequently consolidated at 78.00, shedding 0.62%. The pair was likely to find support at 77.65, the low of June 1 and a three-and-a-half month low and resistance at 78.52, the session high. Concerns that Spain may require a full bailout mounted on Friday, after the state of Valencia requested financial aid from Madrid. In addition, Spain’s government cut growth forecasts for 2013 and said the economy would stay in recession next year. The yield on Spanish 10-year bonds rose to a record 7.48% earlier Monday, above the critical 7% threshold widely considered unsustainable in the long run. In addition, fears over a Greek exit from the euro zone resurfaced, as Athens requested more time to meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday. Earlier Monday, Japanese Finance Minister Jun Azumi reiterated that Tokyo was ready to take decisive steps against speculative moves or excessive volatility in the yen, amid concerns over the impact on the country’s largely export driven economy from the stronger currency. The yen advanced to a 12-year high against the euro, with EUR/JPY tumbling 1.09% to 94.34. Neither the euro zone nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in Europe.

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