(Adds details, sterling and bitcoin moves, updates prices)
The dollar hit a 20-year high against rivals on Thursday as the Bank of Japan doubled down on its dovish policy, sending the yen to its weakest level since 2002, while the euro hit a five-year low on growth concerns for the region.
The dollar shot past the key level of 130 yen after the BOJ strengthened its commitment to keep interest rates ultra-low by vowing to buy unlimited amounts of bonds daily to defend its yield target.
"The BoJ gave the 'all clear' to continue selling the yen," said Lee Hardman, a currency analyst at MUFG Bank in London.
There had been some market speculation the BOJ might step back a little given the pressure building across foreign exchange markets.
A finance ministry official responded that Japan will take appropriate action in currency markets, calling recent moves "extremely worrying."
The yen JPY=EBS was last at 130.90, after reaching 131.25, the weakest since April 2002.
The weak yen helped to catapult the dollar to its highest level since December 2002 against a basket of currencies. The greenback has benefited from expectations the Federal Reserve will hike rates faster than peers, which would likely expand the yield gap between U.S. and Japanese government bonds (JGBs).
"This move in dollar/yen has been primarily due to long-end spread widening between U.S. Treasuries and JGBs," said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto.
The dollar index =USD was last at 103.62, up 0.62% on the day, after reaching as high as 103.93.
The Fed is expected to raise rates by 50 basis points when it concludes its two-day meeting on Wednesday. Aggressive increases are likely to follow at subsequent meetings, with fed fund futures traders pricing for the Fed's benchmark rate to rise to 2.73% by year-end, from 0.33% now. FEDWATCH USONFFE=
The greenback pared gains after data showed U.S. economic growth unexpectedly contracted in the first quarter as a resurgence in COVID-19 cases disrupted activity.
Rai said, however, that the data did not necessarily reflect a weak economy, but was unduly impacted by a sharply wider trade deficit, which was due to surging imports.
"If you actually peel that away and look at the underlying consumption and investment trends, both of those still look reasonably healthy," Rai said.
The euro dropped below the key psychological level of $1.05 as investors remained nervous about Russia cutting off gas to parts of the region for refusing to pay in roubles.
The European Commission on Thursday warned buyers of Russian gas they could breach sanctions if they converted gas payments into roubles, as officials struggled to clarify the EU's stance on Moscow's payments scheme, which has sowed confusion in the bloc.
The euro EUR=EBS was last $1.0505, after earlier reaching$1.0470, the lowest since Jan. 2017.
Sterling also succumbed to dollar strength on Thursday, tumbling to a 21-month low of $1.2412.
Bitcoin BTC=BTSP gained 2.04% to $40,058 and ether ETH=BTSP rose 2.69% to $2,698.
======================================================== Currency bid prices at 3:00PM (1900 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 103.6200 102.9900 +0.62% 8.318% +103.9300 +102.9900 Euro/Dollar EUR=EBS $1.0504 $1.0560 -0.52% -7.60% +$1.0565 +$1.0470 Dollar/Yen JPY=D3 130.8950 128.4300 +1.87% +13.75% +131.2450 +128.3650 Euro/Yen EURJPY= 137.50 135.59 +1.41% +5.51% +137.9800 +135.4400 Dollar/Swiss CHF=EBS 0.9718 0.9693 +0.26% +6.54% +0.9759 +0.9681 Sterling/Dollar GBP=D3 $1.2459 $1.2547 -0.69% -7.87% +$1.2569 +$1.2412 Dollar/Canadian CAD=D3 1.2807 1.2819 -0.09% +1.29% +1.2880 +1.2792 Aussie/Dollar AUD=D3 $0.7094 $0.7127 -0.46% -2.41% +$0.7162 +$0.7055 Euro/Swiss EURCHF= 1.0206 1.0229 -0.22% -1.57% +1.0241 +1.0190 Euro/Sterling EURGBP= 0.8429 0.8417 +0.14% +0.35% +0.8460 +0.8383 NZ NZD=D3 $0.6486 $0.6542 -0.82% -5.21% +$0.6543 +$0.6454 Dollar/DollarDollar/Norway NOK=D3 9.3945 9.3290 +0.78% +6.73% +9.4535 +9.2835 Euro/Norway EURNOK= 9.8717 9.8503 +0.22% -1.41% +9.9219 +9.7903 Dollar/Sweden SEK= 9.8513 9.8420 -0.37% +9.24% +9.9052 +9.7078 Euro/Sweden EURSEK= 10.3490 10.3876 -0.37% +1.12% +10.3971 +10.2541 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Euro/dollar at 5-year lows, dollar/yen at 2-decade highs https://tmsnrt.rs/38tfGJ2^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
