Business

Japanese yen hits an 11-month low against the US dollar

The yen has hit an 11-month low against the dollar as the US currency strengthened on hopes of a recovery in the world's largest economy.

The Japanese currency hit 84.18 yen to the dollar in Asian trade.

That figure compares with 75.31 yen in October last year, which prompted an intervention in the currency markets by the Japanese central bank.

A weak yen is good news for Japanese exporters because it makes their goods more affordable to foreign buyers.

US recovery

Recent data from the US has shown signs of economic recovery.

Official figures last week showed that the US economy created 227,000 jobs in February, while the unemployment rate stayed at the lowest level in nearly three years.

The Labor Department also said that job-creation figures in December and January were stronger than it had first estimated.

At the same time, the US Federal Reserve upgraded its view on the economy, saying it was more optimistic about the recovery.

Analysts said this had reduced the chances of a fresh stimulus by the US central bank and boosted the US dollar.

"The market is reviewing its view on the US economy and scaling back expectations for further US monetary easing or the risk that the US economy will be doing poorly this year," said Makoto Noji senior strategist at SMBC Nikko Securities.

Domestic front

Some analysts said that hopes of fresh stimulus measures in Japan were weakening the yen.

The Japanese economy is still trying to recover from the aftermath last year's earthquake and tsunami.

The Bank of Japan (BOJ) has announced various measures in the past 12 months to boost growth and has continued to expand those programmes.

Last month, the Japanese central bank expanded its asset purchase programme by by 10tn yen ($130bn; £83bn).

Earlier this week, it said it was boosting a loan programme targeted at growth industries by 2tn yen.

Analysts said there was growing speculation the central bank may boost its stimulus measures further, which would see more money being pumped into the markets, resulting in the yen weakening further.

"There is hope that the Bank of Japan will expand its asset purchase programme even more," Junko Nishioka of RBS Securities told the BBC.