The yen pushed deeper into multi-year lows versus the dollar and euro on Tuesday as the market saw every reason to sell the currency with the Japanese central bank on a warpath to battle deflation.
The dollar rose to as high as 99.67 yen on trading platform EBS, the greenback’s strongest level versus the yen since May 2009. The dollar later pulled back a bit on profit-taking and last stood at 99.25 yen, down 0.1 per cent on the day.
The euro hit its highest since January 2010 against the yen of 129.935 yen. The euro last changed hands at about 129.59 yen, up 0.3 per cent from late US trade on Monday.
Since the Bank of Japan (BOJ) unveiled a massive stimulus programme last Thursday, the dollar has climbed roughly 7 per cent against the yen.
“For USD/JPY, upside momentum remains strong and an eventual test of 100.00 seems in the cards, though there are likely to be a number of barriers between 99.50 and 100.00,” said Vassili Serebriakov, strategist at BNP Paribas.
“Markets are increasingly focussed on the notion that larger JGB purchases at longer maturities by the BOJ could push Japanese domestic long-term investors elsewhere.”