The dollar briefly rose above ¥99 for the first time in almost four years in Tokyo trading Monday, supported by a set of aggressive monetary easing measures launched by the Bank of Japan late last week.
The dollar topped ¥99 for the first time since May 8, 2009, in late trading, as the yen remained under strong selling pressure after the BOJ announced the measures Thursday, market sources said.
At 5 p.m., the dollar stood at ¥98.84-85, up from ¥96.30-35 at the same time Friday.
The euro also gained sharply against the yen, rising above ¥128 for the first time in some three years and three months. Europe’s single currency stood at ¥128.44-47, up from ¥124.34-36, and at $1.2994-2995, up from $1.2907-2909.
Under the central bank’s new quantitative monetary easing regime, the BOJ plans to double Japan’s monetary base and the bank’s holdings of long-term Japanese government bonds within two years in order to achieve its 2 percent inflation target and help the country exit deflation.
Carrying over its solid tone from overseas trading Friday, the dollar remained strong against the yen in early Tokyo trading.
Most investors ignored slower than expected growth in U.S. nonfarm payrolls shown in the government’s jobs data for March, released Friday, market sources said.
After rising above ¥98.50, however, the dollar’s topside was capped by selling from Japanese exporters, market sources said.
The dollar later attracted renewed demand and rose above ¥99 at one point after European investors joined trading in late hours.
“The dollar is expected to test ¥100 gradually,” an economist at a think tank said.
As the dollar has risen by ¥6 from levels below ¥93 before the BOJ decision, however, a foreign exchange analyst warned that “the pace of the yen’s weakening is too fast.”
“Although the yen is widely believed to continue weakening, it would take some time before the dollar tops ¥100 from technical and psychological viewpoints,” the analyst added.