LONDON (Reuters – On Thursday, borrowing costs for U.S. dollar in currency derivatives market rose sharply after the dollar rose to its highest point in nearly two decades.

After the Bank of Japan (BOJ), doubled down on its ultra-low yield policy in 2002, the dollar climbed above 130 yen for the first time on Thursday. The euro fell briefly below $1.05. [FRX/]

At 19 basis points, the three-month-old cross-currency Swaps for Euro-dollar have reached their highest level in 3 months since March 8.

This resulted in higher borrowing costs in U.S. Dollars. Swaps of three months show that investors now are prepared to pay nearly 19 bps for U.S. dollar borrowing on Thursday. This is more than twice the amount of just 8 bps one week ago.