Yesterday, the US dollar surged to a 24-year peak against the yen and a 37-year high versus sterling. Japan's dovish monetary policy and Europe's economic problems are now contrasting with a relatively stronger US economy and a hawkish Federal Reserve determined to bring down inflation to its 2% inflation target.
The US currency soared as high as 144.99 yen , hitting the level for the first time since August 1998. It is now within a large leap of its 1998 high of 147.43. The dollar was last up 0.9% at 144.09 yen. Against sterling , the dollar hit $1.1407, the lowest since 1985 and last down 0.1% at $1.1509.
At current dollar/yen levels, speculation is also growing that Japan could intervene to prop up the currency.
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