The dollar sank broadly on Thursday, falling almost another 2 percent to its weakest against the yen since late 2014 after a Federal Reserve meeting that left markets convinced US interest rates would not rise soon.
The dollar index which measures the currency's overall strength fell more than 1 percent to its lowest since October. . It hit 8-month lows against the Australian dollar and its weakest in a month against the euro, at $1.1342.
Even sterling, buffeted by concerns over a slowing British economy and a tightening of some opinion polls ahead of the June referendum on a Brexit from the European Union, rose 0.6 percent to $1.4343.
Last week's data shows the yen is now backed by the biggest speculative positioning for further gains since the 2008 financial crisis drove it below 100 to the dollar. Some analysts say it may reach that level again from 111.12 yen on Thursday.
"We've only seen long positions like this twice in the last 15 years, and both times we've seen big rallies in the yen," said Neil Mellor, currency strategist with Bank of New York Mellon in London.
"I do think that monetary policy in Japan has come to its useful end. Rates-wise, there's a vacuum until we hit 109 yen, beyond that it's the 105s. I certainly would not exclude this ends with a fall below 100 yen per dollar."
The Fed said it now expects two quarter-point rate cuts this year, not four. Moderate growth and strong job gains will allow it to raise rates this year, policymakers said, but the US economy faces risks from an uncertain global outlook.
That was enough to dispel any expectations rates would rise in either April or June. Options contracts coming due in April showed hedge funds and corporate buyers of currencies see the euro as more likely to gain than weaken - only the second time in almost four years that balance has flipped in the euro's favour.
None of that, however, disproves the argument that has supported the dollar for two years: that US interest rates will rise more and remain higher than rates in Japan and the euro zone. Options dated further out this year still show a bias towards dollar strength, although pricing is tighter than it was.
The market's two biggest euro bears, Deutsche Bank and Goldman Sachs, for now are sticking to forecasts for the dollar to reach parity with the single currency this year. Others are less aggressive, but still expect it to strengthen from here.
"Ultimately... the Fed (should be) in a position to hike rates again," analysts from French bank Credit Agricole said. "This should mean that the longer-term risks for the dollar should be on the upside as it becomes an even more attractive investment currency."
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