The euro made further headway above 90 US cents yesterday, encouraged by an improvement in German business confidence, while the yen hit new three-year lows amid suggestion that the government favoured a weaker currency. The single European currency advanced to 0.9034 dollars from 0.9024 earlier in Tokyo and 0.9031 in New York on Friday.

The dollar meanwhile went for 127.55 yen, having earlier ridden as high as 128.03 yen and compared with 127.32 in New York on Friday.

The euro was encouraged by the first upturn in the German business climate since July - albeit from a very low level. The Ifo institute measure of business confidence rose to 84.9 points in November from 84.7 points in October.