* Yen hits 5-month low vs euro, 4-½ month low vs Aussie
* Dollar falls to 2-et," said Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Securities.
"And that means the market is likely to have a bias for a weaker yen," Shioiri said.
The euro climbed more than 1.6 percent to 134.36 yen on trading platform EBS, hitting its highest levels since October.
The euro rose 0.3 percent from late New York to $1.3673, hovering near a 2-½ month peak of $1.3739 touched last week.
The dollar rose 1.3 percent to 98.24 yen, recovering further from a one-month low of 93.55 yen hit last week.
The U.S. government offered a raft of incentives for private investors to help rid banks of up to $1 trillion in toxic assets that plunged the world economy into crisis.
That included a $75-100 billion programme from existing financial rescue funds to help thaw the frozen market for mortgage-backed securities.
The toxic asset plan got a vote of confidence from stock market investors, with Tokyo shares rising more than 3 percent following U.S. stocks' 7 percent surge on Monday, their biggest one-day advance in nearly five months.
The dollar fell back towards a 2-½ month low hit against a basket of currencies last week after a surprise announcement by the Federal Reserve that it would buy a large amount of long-dated Treasuries.
That raised concern the policy could lead to an oversupply of the world's main reserve currency, and sent the dollar tumbling to its biggest weekly slide against the basket of currencies since 1985 last week.
In a sign of growing debate over the dollar's status as the dominant global reserve currency, Chinese central bank chief Zhou Xiaochuan said on Monday that Special Drawing Rights allocated by the International Monetary Fund could be used as a super-d got a sharp lift due to the broader weakness in the yen and the dollar, traders said, touching its highest since early December near 144.90 yen and a peak since early February at $1.4729. (Additional reporting by Masayuki Kitano; Editing by Chris Gallagher)