Sterling rose to its highest in 15 years against the yen on Monday, as investor appetite for risk retained interest in the higher-yielding British currency. Broad dollar weakness after softer-than-expected US inflation data last Friday also gave sterling the upper hand against the greenback.
The yen stayed on the backfoot across the board, hitting a record low against the euro as expectations for Japanese rates to rise only gradually from 0.5 percent remained intact, giving the green light to continued carry trades where investors use low-yielding currencies to fund purchases of high return assets.
"When risk appetite is fairly buoyant, people like holding the carry trade," RBS currency strategist Paul Robson said.
By 1352 GMT, sterling stood at 244.69 yen, having hit a 15 year high earlier at 244.96. The pound was up 0.3 percent on the day against the dollar at $1.9814, while the euro was down 0.1 percent at 67.63 pence. On the data front, property website Rightmove released figures earlier on Monday showing that asking prices for homes in England and Wales picked up modestly from mid-May to mid-June but property inflation held below peaks scaled earlier this year.
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