Euro at its highest levels since 2008 against Yen

On Tuesday, the Japanese yen plummeted to multi-year lows against both the dollar and the euro, prompting heightened vigilance among traders for potential government intervention ahead of the Bank of Japan’s upcoming meeting.

Conversely, the British pound saw a decline to its lowest levels in several months following dovish remarks from monetary policymakers.

The euro experienced widespread gains after robust business activity data from France and Germany, reaching 165.62 yen, its highest level since 2008.

Meanwhile, the dollar surged to 154.87 yen, marking its highest level since 1990, nearing the significant threshold of 155 yen, which many traders view as a trigger point for Japanese authorities’ intervention.

Market anticipation is focused on the Bank of Japan’s forthcoming forecasts, slated for release on Friday, with expectations that inflation will hover around its two percent target over the next three years. This indicates the bank’s readiness to cautiously raise interest rates from the current near-zero levels later this year.

In currency pair movements, the euro edged up 0.2 percent against the dollar to $1.06753, stabilizing after earlier losses in the month.

Against the pound sterling, the euro increased by 0.16 percent to 86.39 pence, briefly hitting a four-month high of 86.43 pence, spurred by German PMI data.

Comments from Bank of England policymakers suggesting a belief that inflation will gradually ease towards the two percent target have bolstered market confidence in potential interest rate cuts by the Bank of England during the summer.

Earlier expectations of significant interest rate cuts by the Bank of England, following the European Central Bank’s actions, have supported the pound sterling in recent months, with markets currently anticipating ECB moves in June.