The dollar has broken out of the 100-110 yen trading range after having stayed in a holding pattern for several weeks amid concern over political uncertainty in Japan and the United States.
To market participants' extreme surprise, the dollar hit a nine-month high of 111.47 yen briefly before settling at 111.00-95 yen Monday in Tokyo. Until quite recently, there was a virtual consensus that the dollar would run into strong resistance if it neared 111 yen.
Indeed, the volatility of New York and Tokyo share prices kept the dollar-yen rate from moving decisively in either direction. However, the dollar is now taking advantage of signs of weakness in the Japanese economy.