The yen fell broadly on Monday, as investors took on perceived riskier assets on growing hopes that a global economic downturn may have hit bottom.
The dollar rose above 101 yen, the highest in almost six months, while the euro also extended gains against the Japanese currency to levels seen last October.
"Markets are taking heart that the pace of economic contraction is fading," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ. "That is helping risk assets and prompting the unwinding of safe assets, namely yen and dollar."
Data on Friday showed U.S. firms shed another 663,000 jobs in March, while the unemployment rate soared to 8.5 percent. But prior data was revised to show job losses of 741,000 in January, which some saw as possibly the bottom of the job loss cycle.
By 0733 GMT, the dollar was up 0.8 percent at 101.15 yen, after rising to 101.23 yen, the highest since Oct. 21, 2008, according to Reuters data.
A move above 101.00 was technically significant as it was a 38.2 percent Fibonacci retracement of its decline from a peak in 2007 to its 13-year low in January.
Others added the dollar/yen pair may have entered a downward trendline, with 103.50 yen as a next key level.
The euro hit a high of 137.06 yen before receding to be up 1.2 percent at 136.90 yen.
Traders also said a recovery in emerging market assets, buoyed by G20 steps to help developing economies last week, added to investors' appetite for riskier and higher-yielding currencies such as the Australian and New Zealand dollars.
"The yen seems to be becoming the easiest to secure in the market now, compared with the dollar and euro. A move may be emerging in which speculators use the yen to fund investments in other currencies and assets," said Mitsuru Saito, chief economist at Tokai Tokyo Securities.
"We can probably say a mini yen carry trade is back," Saito said.
Carry trades are when investors sell a low-yielding currency to buy higher-yielding assets and they were hugely popular among Japanese retail investors earlier in the decade.
European shares were higher in early trade, up 1.3 percent on the day
The dollar lost ground against other major currencies as risk appetite improved.
The euro gained 0.4 percent to $1.3534.
Sterling rose above $1.4900 to its highest in two months, driven by gains against the yen and up 0.6 percent on the day. The pound also rose above 150 yen.
Data due out later in Monday include euro zone April Sentix index, and retail sales and producer prices for February.
The New Zealand dollar rose 1.1 percent at $0.5922 while it jumped more than 2 percent at one stage to a five-month high above 60 yen. The Australian dollar gained 1.3 percent to a six-month peak of 72.74 yen, according to Reuters data.
North Korea's launch of a rocket that passed over Japan on Sunday provoked international outrage but traders said the impact on financial markets in the region was limited as the outcome was largely in line with expectations.
