Investing.com - The yen rose to fresh 18-month highs against the broadly weaker dollar on Monday amid the view that Japanese officials would not intervene in the foreign exchange market to weaken the currency.
USD/JPY hit lows of 106.16, the weakest level since mid-October 2014 and was last at 106.37.
The pair ended the prior week down 4.49%, the worst weekly performance since the 2008 global financial crisis after the Bank of Japan held off from implementing fresh easing measures at the conclusion of its policy meeting on Thursday, defying market expectations for further stimulus.
Over the weekend, Japan’s Finance Minister Taro Aso said the strength of the yen was "extremely concerning," but most traders expect Japanese officials will not intervene to stem the appreciation of the currency in the absence of support for such a move.
On Friday the U.S. Treasury flagged concerns over economic policies in China, Japan, Korea, Taiwan, and Germany which all have a large current account surplus.
The Treasury said it would closely monitor the economic trends and foreign exchange policies of the five countries.
In its report, the Treasury noted that the current dollar-yen market was "orderly" and reiterated all countries must abide by G20 and G7 commitments on exchange rate policies, widely seen as a call for Japan to limit foreign exchange interventions.
The dollar remained under pressure after the Federal Reserve kept interest rates on hold last week and indicated that any future interest rate hikes would be data dependent.
Data on Thursday showed that the U.S. economy grew at the slowest rate in two years in the first quarter, with gross domestic product increasing just 0.5% form a year earlier.
Another report on Friday showed that both personal spending and the personal consumption expenditures price index, the Fed’s preferred inflation measure, ticked up 0.1% in March.
The euro edged up to six-month highs, with EUR/USD at 1.1469.
Sterling was trading close to 12-week highs against the greenback, with GBP/USD at 1.4618.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was close to eight-month lows at 92.92. The index ended the previous week down 2.14%.