* Dollar drops after shift in Fed policy
* Yen jumps after Abe resignation
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By April Joyner
NEW YORK, Aug 28 (Reuters) - The dollar fell on Friday as the U.S. Federal Reserve's new policy framework suggested that interest rates would remain low, while the yen surged after Japanese Prime Minister Shinzo Abe announced his resignation.
The yen JPY=EBS significantly strengthened against the dollar after the news that Abe, Japan's longest serving prime minister, would step down due to worsening health. about a possible shift away from Abe's expansionary economic policy, known as Abenomics, drove the move in the safe-haven currency, investors said.
The dollar was last down 1.0% against the yen at 105.45.
"You're seeing yen strength on a little bit of uncertainty," said Lou Brien, strategist at DRW Trading in Chicago. "Abenomics has been one of the more influential economic strategies."
The greenback resumed its slide against a basket of major currencies in the wake of Fed Chair Jerome Powell's remarks at the virtual Jackson Hole conference. Powell said the U.S. central bank would seek to keep inflation at 2%, on average, so that periods of too-low inflation would likely be followed by an effort to lift inflation above 2% for some time. practice, market participants expect that this means the current ultra-low rates will stay lower for longer, thereby pressuring the dollar. After recovering from an initial slide on Thursday immediately after Powell's speech, the dollar weakened once again overnight.
The dollar index =USD was last 0.5% lower at 92.513.
As the dollar weakened, the euro EUR=EBS climbed 0.4% to $1.1875.
The euro's ascent puts it closer to a technical level of $1.19, said Brien, which it has tested periodically over the last month.
"If it goes through it, it could be a significant moment," he said. "The (Fed's) new stance on inflation gives it an opportunity to retest it."
Currency markets were broadly pro-risk. The New Zealand dollar NZD=D3 hit its highest against the U.S. dollar since January while the Australian dollar rose to its highest since December 2018 AUD=D3 .
The U.S. dollar also lost around 1.0% to the Norwegian crown NOK=D3 and 0.8% to the Swedish crown SEK=D3 .
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Currency bid prices at 10:19AM (1419 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
EUR=
$1.1875
$1.1821
+0.46%
+5.93%
+1.1919
+1.1812 Dollar/Yen
JPY=
105.4500
106.5500
-1.03%
-3.13%
+106.9400 +105.2100 Euro/Yen
EURJPY=
125.25
125.96
-0.56%
+2.71%
+126.7500 +125.2000 Dollar/Swiss
CHF=
0.9058
0.9088
-0.33%
-6.41%
+0.9102
+0.9025 Sterling/Dollar GBP=
1.3287
1.3198
+0.67%
+0.21%
+1.3320
+1.3187 Dollar/Canadian CAD=
1.3110
1.3123
-0.10%
+0.95%
+1.3132
+1.3047 Australian/Doll AUD=
0.7333
0.7258
+1.03%
+4.44%
+0.7349
+0.7256 ar
Euro/Swiss
EURCHF=
1.0759
1.0744
+0.14%
-0.86%
+1.0768
+1.0743 Euro/Sterling
EURGBP=
0.8938
0.8954
-0.18%
+5.73%
+0.8974
+0.8936 NZ
NZD=
0.6714
0.6637
+1.16%
-0.33%
+0.6728
+0.6631 Dollar/Dollar
Dollar/Norway
8.8187
8.9151
-1.08%
+0.46%
+8.9218
+8.7781 Euro/Norway
EURNOK=
10.4740
10.5370
-0.60%
+6.47%
+10.5530
+10.4530 Dollar/Sweden
SEK=
8.6506
8.7160
-0.39%
-7.45%
+8.7355
+8.6100 Euro/Sweden
EURSEK=
10.2749
10.3156
-0.39%
-1.86%
+10.3215
+10.2602