The yen was under pressure today while demand for higher-yielding currencies was robust after better-than-expected US jobs data supported optimism about an economic recovery.
The yen fell broadly, with traders citing yen-selling flows from hedge funds. Currencies such as the Australian dollar rose against the yen, getting a boost from a rise in demand for equities and other risky assets.
"The US jobs report last week helped investor anticipation for further recovery in the next employment report and encouraged them to seek risky assets," said Mitsuru Sahara, chief manager of currency derivatives trading at Bank of Tokyo-Mitsubishi UFJ.
The yen was also weighed down by speculation that the Bank of Japan would further loosen its already lax monetary policy soon to address deflationary pressure in the economy.
The yen weakened after the Nikkei newspaper reported on Friday that the BOJ was examining easing again and may decide on such a move when it meets on March 16th-17th. Sources familiar with the matter said the BOJ is likely to debate this month easing its ultra-loose monetary policy again.
Low interest rates mean the yen tends to fall when risk appetite rises and as investors borrow the yen to finance more lucrative trades in other currencies and assets.
The euro rose 0.5 per cent against the yen from late US trading on Friday to 123.65 yen. The euro hit a two-week high of 123.80 yen on trading platform EBS earlier today and added to its 1.6 per cent jump against the yen logged on Friday.
The dollar also touched a two-week high against the yen of 90.69 yen. After trimming some gains, it was 0.1 per cent higher on the day at 90.43 yen.
Reuters