The yen fell to a record low versus the euro and a 32-month low against the dollar on Monday after Japanese officials signalled on the sidelines of a G7 meeting that they were unfazed by the currency's slide.
The yen was not discussed at the weekend meeting of finance ministers and central bankers from the world's leading economies, giving market players more reason to think that Group of Seven officials have no qualms about the currency's weakness.
Speculation had mounted that Japan might be getting nervous about the yen's widespread decline this year as investors have chased higher yields elsewhere, with the Bank of Japan seen keeping overnight rates near zero for an extended period. But Japanese Finance Minister Sadakazu Tanigaki said after the G7 meeting that the yen's fall through 121 to the dollar reflected economic fundamentals, sticking to the ministry's script on currency moves.
BoJ Governor Toshihiko Fukui said on Saturday the weaker yen was not a problem and was consistent with the central bank's policy of fostering growth.
Big buying of foreign bonds by Japanese investors, combined with foreigners hedging their purchases of Tokyo shares to protect against a further yen drop, have helped drive the dollar up about 18 percent versus the yen this year.
The euro rose as far as 142.40 yen, its highest since its launch in 1999, and was trading close to those levels at 1309 GMT.
The dollar climbed as high as 121.39, its loftiest since March 2003, before easing to 120.79. The euro jumped against the dollar in line with euro/yen's moves, reaching its highest since Thursday at $1.1784 and was last trading at $1.1772.
The New Zealand dollar hit five-month highs against the dollar on expectations of a quarter-point rate hike in New Zealand later this week, to 7.25 percent.
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