TOKYO: The yen resumed its downward trend against the dollar and euro on Wednesday after a brief surge at the start of the week that was fuelled by fears about the global economy.
The dollar rose to 98.41 yen in afternoon Asian trade, compared from 97.79 yen in New York Tuesday afternoon and well up from the levels around 96 yen seen on Monday.
The euro was at 129.66 yen, against 128.86 yen in the US after slipping to as low as 126 yen Monday. The euro also fetched $1.3176, compared with $1.3180 in New York.
Traders expect the dollar to climb above the 100 yen mark soon after the Bank of Japan this month unveiled a huge stimulus programme aimed at kickstarting the economy and dragging it out of years of debilitating deflation.
Wednesday's yen losses boosted Japan's Nikkei, which rose more than one percent in the afternoon, while a rally on Wall Street also provided buying impetus.
US stocks rebounded after slumping in line with a global rout following weak Chinese growth data, while dealers were also spooked by a double bomb attack on Boston that killed at least three people and injured more than 180.
The New York run was also helped by upbeat housing data and strong corporate results.
Non-Japanese investors were seen moving back into the market, likely taking a cue from the rise on the Nikkei, a senior trader at a major bank in Tokyo told Dow Jones Newswires, adding that the dollar would extend its rally.
"At least for now I don't see any reasons to sell the dollar," he added.
Markets was also keeping an eye on the Korean peninsula, with the North said to be lining up a missile launch with tensions rising between Pyongyang, Seoul and the United States.
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