The dollar hit a three-and-a-half month high against the yen to the lower JPY 80 level on Tuesday on the back of positive US economic data and expectations for additional monetary easing measures by the central bank.
At 3:20 p.m. (0620 GMT), the greenback fetched JPY 79.87-90 compared with Monday's 5 p.m. quotes of JPY 79.89-99 in New York and JPY 79.69-70 in Tokyo. The dollar briefly touched JPY 80.01, its highest since July 6.
Expectations for further easing at the Bank of Japan (BOJ)'s policy meeting on October 30. are high after the Finance Ministry released data on Monday showing Japan's biggest trade deficit for the month of September due to plunge in exports.
At a quarterly meeting of the central bank's regional managers on Monday, BOJ Governor Masaaki Shirakawa said the BOJ will proceed with monetary easing in a continuous manner, while warning that the risk of the impact of Europe's debt problems spreads to the Japanese economy through financial markets.