Euro at highest since 2008 on yen, markets nervous about Toyko stepping in
euro on Tuesday, keeping investors on heightened intervention watch ahead of the Bank of Japan's meeting this week, while dovish policy maker chatter left sterling around its softest in months.
The euro, which climbed broadly after stronger than expected business activity data in France and Germany, reached 165.62 yen, its highest since 2008.
«That's a combination of the stronger euro today, with the services data moving back into expansionary territory, an encouraging sign that the headwinds to growth for consumer spending are continuing to fade, and the yen continuing to weaken on the expectation that the BOJ will be very gradual in tightening policy,» said Lee Hardman, senior currency strategist at MUFG.
The dollar rose to 154.87 yen, its highest since 1990, edging ever closer to 155, a level considered by many participants as the new trigger for intervention by Japanese authorities.
Japanese Finance Minister Shunichi Suzuki said last week's meeting with his U.S. and South Korean counterparts has laid the groundwork for Tokyo to act against excessive yen moves, the strongest warning to date on the chance of intervention.
However, there are doubts about whether Tokyo will act so close to the BOJ's two-day policy meeting that starts on Thursday.
Japan's central bank is expected to project inflation will stay around its 2% target for the next three years in new forecasts due on Friday, signalling its readiness to cautiously raise interest rates again this year from current near-zero levels.
«We've had
