The dollar weakened for a second day against the yen, following a five-day advance, amid speculation its recent climb was too rapid.

The U.S. currency is headed for gains against all of its 16 major counterparts this year for the first time since 2000 as the Federal Reserve moves to raise interest rates next year for the first time since 2006. Australia™s dollar traded within a cent of its post-float low to its New Zealand peer.

The dollar declined 0.2 percent to 120.32 yen at 9:48 a.m. in Tokyo from yesterday, when it fell 0.2 percent. It reached 120.83 yen on Dec. 23, the highest since Dec. 9, and gained 3.7 percent during the five-day advance.

The U.S. currency was little changed at $1.2192 per euro after weakening 0.2 percent yesterday. The yen gained 0.1 percent to 146.82 per euro.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, has risen 11 percent this year, set for the biggest annual gain in data starting in December 2004.

The gauge was little changed at 1,1130.64 after falling 0.3 percent yesterday, a day after its 14-day relative-strength index reached 71, above the 70 level some traders see as a signal an asset may have risen too far, too fast.

Australia™s dollar traded at NZ$1.0488 after reaching NZ$1.0477 on Dec. 23. That was the lowest level since December 2005, when it recorded the post-float low of NZ$1.0432.

Source : Bloomberg