HONG KONG Reuters -- The yen fell to a new 20 year low against the dollar on Monday, as red hot U.S. inflation data drove up Treasury yields, diminishing the boost it received from speculation that Japanese authorities could intervene to support the currency.
The dollar climbed 0.43% to 135 yen, a 20 year peak, and moved closer to the 2002 high of 135.20 on Monday.
The yen rallied briefly late on Friday when Japan's government and central bank said they were concerned by its recent sharp falls, a rare joint statement seen as the strongest warning to date that Tokyo could intervene to support the currency.
According to Barclays analysts, rising overseas yields and energy prices and continued dovish Bank of Japan messages have pushed USDJPY to two-decade highs.
They expect the dollar yen to trade between 131 and 136 this week, and noted that there are no clear thresholds above the 2002 high other than the round figures of 136, 137 and 138. The benchmark U.S. 10 year yield touched 3.2% on Monday morning, after U.S. inflation beat expectations, leading bets that the Fed will have to hike rates even more aggressively.