The yen dropped to one-month lows against the dollar and the euro on Wednesday, as traders took data showing Japan had logged its first annual trade deficit since 1980 as a cue to snap up gains in the Japanese currency. Selling in the yen picked up steam on the back of unwinding of yen long positions placed by speculators, with model and macro funds also spotted pressuring the Japanese unit.

Tokyo exporters limited the downside for the yen, showing strong dollar-selling interest right below 78 yen, after the safe-haven yen on Tuesday suffered its biggest one-day fall since Japan intervened in the market in October.