The US dollar slumped almost two yen to a one-month low yesterday, after a flood of optimism over fresh economic reforms in Japan lifted the yen, and long-standing dollar bulls left the market. Trading in Asia as high as 130.26 yen, the dollar fell sharply to 128 yen in London, as traders conceded the Bank of Japan's policy of resolutely capping dollar strength through market intervention had finally paid off. Bankers Trust economist Ernesto Ramirez said the 6.11 per cent gain in Tokyo's Nikkei-225 Index was a key factor in the yen's strength. Stocks surged amid reports the ruling Liberal Democratic Party was planning to allow companies to revalue land holdings based on market price. Further boosting the yen were expectations Japan would take a more active role in seeking to end the Asian financial crisis. 'Japan is under intense pressure from the international community to do more to stabilise the region,' Mr Ramirez said. 'We expect them to take a greater role.' Traders said there was also a sudden outflow of long-dollar positions, many of which were set up at the start of the year, when the dollar was at about 130 yen.