The Japanese yen rallied to a new multi-month high on Thursday helped by the yen-supporting comments by policymakers of the world's third largest economy while the Fed's dovish remarks pressured down the greenback broadly.
Japanese Prime Minister Shinzo Abe warned against currency intervention and as Federal Reserve policy meeting minutes overnight dampened expectations of an early U.S. interest rate hike.
Meanwhile, the Bank of Japan Governor Haruhiko Kuroda said that the Japanese economy is on a moderate recovery trend although a slowdown in emerging economies has hurt exports and production.
The USD/JPY pair dropped to as low as 109.10 on Thursday, its lowest since late October 2014 and compared to the previous close of 109.79.
Technically, the pair has broken below all the Fibonacci retracement levels of the one year-rally from mid-2014. The most important and immediate support level for the pair is 106.0 ahead of retesting 100.0.
Analysts, however, also point out the downside risks to exporters of the country because of a rising yen.
Against the British pound, the Japanese currency has jumped to a 2 ½- year high. The GBP/JPY cross plunged to 153.94 on Thursday, its lowest since September 2013 and from Wednesday's close of 155.05.