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Forex pairs in this Article » USD/JPY (London) - The dollar continues to gain against the yen, up a further 0.08 percent to JPY104.2695 regaining ground towards Friday’s highs at JPY104.54.

The dollar has threatened five-year highs against the yen on diverging monetary policy. Last week, the US Federal Reserve announced that it would cut its monthly asset purchases by USD10bn to USD75bn a month while maintaining its commitment to ultra low interest rates.

By contrast, the Bank of Japan continues to purchase JPY7 trillion of government bonds each month as it continues to battle with inflation. BoJ officials have indicated that they are prepared to ramp up these bond purchases as they target 2 percent inflation. The yen has fallen 15 percent this year as policy makers attempt to import inflation through a weaker yen.
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