2013.04.1007:06:34UTC+00Yen hits three-year low versus euro as slide deepens

The yen made a three year low mark against the euro and made it closer to 100 to the dollar on Wednesday. It extended a slide that was triggered by Bank Of Japan’s radical monetary easing steps.

Gains against the yen helped push the euro to a one-month high against the dollar. It is because the single currency has been supported in recent days by market speculation that Japanese investors looking for higher returns may pile into euro zones assets."Around 100 people have a lot of barriers they try to defend by selling. It makes sense we have stalled but we are going to go through that level, it's just a matter of time," said Geoff Kendrick, currency strategist at Nomura.The dollar rose 0.4 percent to 99.35 yen, just shy of Tuesday's peak of 99.67 yen, its strongest since May 2009.

Technical resistance lies at 99.73 yen, the 50 percent retracement of the dollar's drop from its June 2007 high of 124.14 yen to a record low of 75.311 yen set in October 2011.

The dollar has jumped around 7 percent against the yen since last Thursday when the BOJ said it would pump about $1.4 trillion into the economy and double Japan's monetary base in two years to defeat deflation.

Market players were taken by surprise by the scale of the BOJ's actions and many strategists hastily revised their dollar/yen forecasts higher as a result.

The next focus for investors will be minutes from the Federal Reserve's latest policy meeting, due for release later in the session. The minutes could spur more demand for the dollar if they contain any hint the central bank is considering tapering its asset purchase program.

The single currency climbed 0.2 percent to $1.3116, its highest since March 8.

There has been market talk that plummeting Japanese bond yields have already sent Japanese investors in search of higher returns overseas, helping push French, Dutch, Austrian and Belgian bond yields to record lows.

But many market participants were skeptical as Japanese institutional investors are notoriously cautious, and said the flows were more likely driven by speculators buying in anticipation of their arrival.

"There is a lot of talk about Japanese investors moving abroad, but it's hard to see them heading for bonds from the likes of Spain or Portugal. They're unlikely to buy (German) Bunds either as they don't offer any yield," said Kyosuke Suzuki, director of foreign exchange at Societe Generale.

The Australian dollar hit a 2-1/2 month high of $1.0525 after data showing Chinese imports surged 14.1 percent on the year, well beyond market expectations, overtaking exports to create a mild trade deficit.

The Australian currency was last up 0.3 percent at $1.0515.