By Alun John

HONG KONG (Reuters – Monday’s slide in the Japanese yen was resuming after the Bank of Japan intervened on the market to preserve its implicit yield cap. Meanwhile, bitcoin surged to its most recent high this year, ahead of a week of rich data that will help markets.

The yen plunged to 122.78 dollars per dollar on Friday. This is its lowest level since December 2015 and a complete halt to its recovery.

The BOJ however offered to purchase unlimited 10-year Japanese government bonds (JGBs), at 0.2%, Monday morning after the yield on the JGBs climbed to an all-time high of 0.245% six years ago.

Analysts at the firm stated that “while there is a possibility of near-term correction given its rapid ascent,” they expect dollar-yen’s support to continue at high levels. Barclays (LON:), inciting monetary divergence, and the negative effects of higher commodity prices upon Japan’s terms–of-trade.

Markets are pricing aggressive rate increases this year due to the U.S. Federal Reserve’s strongly hawkish stance. The Bank of Japan, however, is still dovish. This may be because policy makers fear that rising fuel costs will cause higher inflation, which could lead to the third largest economy in the world.

On Sunday, a senior Japanese official stated that the monetary policy should remain flexible.

Higher commodity prices have pushed the yen down in recent weeks but they are a strong impetus for commodity currencies.

At $0.75115 the dollar held near its four-month high. The Canadian dollar stood at 1.2496 per $1, just behind Friday’s two-month peak.

On Tuesday, Aussie currency watchers will also be watching Australia’s budget. Australia’s Treasurer said on Sunday the budget would mark a very significant material improvement to the government’s bottom line.

The COVID-19 situation is a potential headwind for Australia, as Shagnhai stated on Sunday that it will close down the Chinese city in order to conduct COVID-19 testing.

Dollar rose by 0.17% Monday morning to 6.394

Major eurozone economises are due to report inflation figures from Wednesday, and “stronger-than-expected Eurozone CPI will add to rates market pricing for ECB tightening, underpinning the euro,” the Barclays analysts said.

The currency single was at $1.0973 as of last night. This is despite being slightly less than it was in recent times, but still in pressure due to the economic consequences of the conflict in Ukraine.

Sterling declined 0.1% at $1.3168 while it was stable at 98.909.

U.S. Non farm payrolls data will also be available on Friday. Analysts don’t expect this to impact the U.S. dollar and U.S. interest rates expectations, as the market is already poised for several rate increases this year.

After jumping as high as $47.766 in early trading and its highest point since January, bitcoin is now sitting at $46,800. The world’s second-largest cryptocurrency, Ether was $3,289.