LONDON, Feb 27: The yen hit a one-month high against the dollar and a six-week high against the euro on Monday amid fresh signs that the Bank of Japan will soon end its ultra-easy monetary policy and eventually raise interest rates.

The dollar dropped to as low as 115.68 yen in Asian trading on Monday, slipping below the 116 mark for the first time since January 26. In late European trade, the dollar stood at 115.97 yen from 116.84 yen on Friday.

Meanwhile, the euro fell to its lowest level against the dollar in nearly two months, falling to $1.1859 from $1.1874 in New York late on Friday.

Dealers have been chasing the yen higher since Bank of Japan governor Toshihiko Fukui dropped strong hints last week that the central bank is approaching the end of its five-year-old, extra-stimulative monetary policy.

It is now widely believed that an end to the BoJ’s practice of flooding the banking system with cash is likely by April and possibly even as soon as next week, following recent signs that deflation is almost beaten, dealers said.

“As the government is growing increasingly receptive to the idea of a policy shift, the central bank could very well change policy as early as March 9,” said Barclays Capital strategist Masuhisa Kobayashi.—AFP