Yen hits multi-year low

The yen pushed deeper into multi-year lows against the dollar and euro on Tuesday as the market saw every reason to sell the currency with the Japanese central bank on a warpath to battle deflation. The dollar rose to as high as 99.67 yen on trading platform EBS, the greenback's strongest level versus the yen since May 2009. The dollar later pulled back on profit-taking and last stood at 99.23 yen, down 0.2 percent on the day.
The euro hit its highest since January 2010 against the yen of 129.935 yen. The euro last changed hands at 129.48 yen, up 0.2 percent from late US trade on Monday.
Since the Bank of Japan (BoJ) unveiled a massive stimulus programme last Thursday, the dollar has climbed roughly 7 percent against the yen.
"For USD/JPY, upside momentum remains strong and an eventual test of 100.00 seems in the cards," said Vassili Serebriakov, strategist at BNP Paribas.
In a research note, analysts at J. P Morgan noted that Japanese households hold 55 percent of their financial assets in deposits and cash, compared to 14 percent in the United States and 36 percent in the euro zone. They added that Japanese life insurers hold 140 trillion yen in Japanese government bonds (JGBs).
One possible technical resistance for the dollar lies at about 99.73 yen, which is the 50 percent retracement of the dollar's drop from a June 2007 high of 124.14 yen down to a record low of 75.311 yen set in October 2011.
Underscoring the Japanese currency's weakness, commodity currencies touched multi-year highs against the yen on Tuesday, with the Australian dollar hitting its highest since July 2008 at about 103.80 yen and the New Zealand dollar rising to its highest since February 2008 at about 84.49 yen.
Earlier, the Australian dollar edged higher after data showed China's annual consumer inflation eased to 2.1 percent in March from February's 3.2 percent, leaving Chinese policymakers room to keep monetary policy loose to support an economic recovery.
After giving back some of its gains, the Australian dollar fetched $1.0431, up 0.2 percent on the day.
Elsewhere, the euro rose 0.3 percent to $1.3046. The euro hit a three-week high of $1.3068 earlier after triggering some stop-loss buying at levels near $1.3050.