The yen slumped to a 20-month low against the U.S. dollar and a 16-month trough versus the euro on Wednesday, after Shinzo Abe assumed office as Japan's new prime minister and reiterated his pledge to push for more drastic monetary and fiscal measures and tame the strong Japanese currency.

Meanwhile the euro traded above $1.32 against the U.S. dollar for a seventh straight session and in early New York trading was up slightly on the day. Traders said the euro's gain was due to position adjustment going into the end of the year, with investors continuing to reduce short bets on the currency.