FOREX-Yen slides as possible next PM calls for forceful BOJ easing
* Japan LDP's Abe reiterates calls for more BOJ easing
* Abe's opposition party leads in polls ahead of Dec vote
* Dollar hits 6-1/2 month high versus yen
By Masayuki Kitano
SINGAPORE, Nov 15 (Reuters) - The yen hit a 6-1/2 month low against the dollar on Thursday after the head of Japan's main opposition party, the frontrunner in next month's election, called for aggressive monetary easing by the Bank of Japan to support growth.
Shinzo Abe, the head of the Liberal Democratic Party, said he wants the BOJ to set interest rates at zero or below zero to enhance lending.
In addition, Abe said he wants to work with the BOJ to reverse the trend of a stronger yen as it hurts the competitiveness of small firms.
Abe's party leads in opinion polls, putting him in a pivotal position to become the next premier after a general election to be held next month.
The dollar rose to as high as 80.95 yen on trading platform EBS, its highest level since late April, and last traded at 80.83 yen, up 0.7 percent from late U.S. trade on Wednesday.
The yen extended its losses after having suffered its biggest losses against the dollar and the euro in two months the previous day, when Japanese Prime Minister Yoshihiko Noda indicated he will call a snap election in December.
Still, while the dollar seems likely to find support near 79 yen, it is unclear whether the greenback is ready to see a sustained push higher against the yen at this juncture, said Jesper Bargmann, Asia head of G11 spot FX for RBS in Singapore.
"I'm not convinced yet. A sustained move higher in the dollar may have to be on the back of a move higher in U.S. yields," Bargmann said.
The yen retreated broadly, with the euro climbing 0.8 percent to 103.01 yen and the Australian dollar rising 0.6 percent to 83.66 yen.
Most of the yen selling appeared to come from non-Japanese reacting to Abe's call for the BOJ to ease aggressively, a trader for a major Japanese bank in Singapore said.
Against the dollar, the euro held steady at $1.2737, staying above Tuesday's two-month low of $1.2661, where it had found some technical support, including its 90-day average and the Ichimoku cloud bottom.
On candlestick charts, the euro had formed a so-called "doji" pattern against the dollar on Tuesday, which could be seen as a bullish reversal signal. Such a pattern often appears when the market is indecisive about extending a trend.
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