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The dollar gained more than 1 percent versus the yen on Monday after Japan’s minister cautioned that Tokyo was prepared to intervene in the foreign exchange market if needed, while the euro was slightly moved against the dollar.

USD/JPY reached intraday high of 108.60, which is the highest since April 29, and was last up at 108.42, climbing 1.2 percent on Monday. The greenback had dropped to its 18 month lows of 105.05 against the yen last week.

Japan’s finance minister Taro Aso reported on Monday that Tokyo is ready to intervene in the currency market if excessive moves in the yen are enough to hit Japan’s trade, economic and policies.

The yen briefly showed reaction on the remarks amid the sentiment that Japanese officials are unlikely to take steps to lower the currency in the absence of support for such a move.

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Last month, the United States Department of Treasury added Japan to watch list of countries it is monitoring to measure whether their foreign exchange policies provide an unfair trade advantage.

In its report, the Treasury reported that the current dollar and yen were orderly and restated all countries must abide G20 and G7 commitments on exchange rate policies, widely considered as a call for Japan to cut foreign exchange interventions.

Japan Finance Minister Taro Aso also stated on Monday that the Treasury’s move to put Japan on a watch list will not constrain Tokyo’s currency policy.

The yen has become robust since the Bank of Japan did not implement new stimulus gauges at its April meeting, defying market expectations for further easing. The strengthened yen is posing a challenge to the Bank of Japan’s attempts to boost price growth.

Demand for the greenback was also underpinned after New York Federal Reserve President William Dudley reported on Friday that it was reasonable to anticipate for two rate hikes this year, despite data indicating that United States jobs growth surged at the slowest rate in seven months in April.

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Japanese yen was also steeply lower than the euro, as EUR/JPY soared 1.11 percent to 123.50.

Meanwhile, the euro was slightly moved versus the greenback, with EUR/USD tacked on 1.1396.

In the euro zone, data on Monday indicated that sentiment among market players and market analysts improved a little in May, but worries over the outlook for the global economic health continued to weigh.

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