Triggering the dollar's fall in recent weeks was a switch in the global investment flow back into equities.
Having shunned stocks for the safety of fixed-income securities earlier in the year, investors have returned to equity markets in search of capital gains as the upturn in New York share prices has spilled over into the Tokyo stock market, providing a major lift to the benchmark Nikkei average and the yen.
The yen's strong showing also reflects optimism about the Cabinet of Prime Minister Junichiro Koizumi.