Hawkish Powell pushes yen past 120 barrier

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A U.S. hundred dollar bill and Japanese 10,000 yen notes are seen in this photo illustration in Tokyo, February 28, 2013. REUTERS/Shohei Miyano/File Photo

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SINGAPORE, March 22 (Reuters) – The yen fell through the psychological 120 level for the first time since 2016 on Tuesday, after a hawkish speech from Federal Reserve Chair Jerome Powell raised bets on higher U.S. interest rates and widened the policy gap on a dovish Bank of Japan.

The yen fell about 0.4% to briefly hit 120.08 per dollar in early Asia trade. It is down about 4% this month as leaping U.S. yields have lured flows from Japan.

“Widening policy divergence is continuing to push the yen to more deeply undervalued levels against the U.S. dollar,” MUFG currency analyst Lee Hardman said.

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The dollar was broadly stronger elsewhere and pushed the euro down 0.2% to $1.0992.

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