The yen dropped to its lowest against the US dollar in more than two years on Thursday on expectations a new government in Tokyo will push for aggressive monetary stimulus to boost a sluggish economy and take steps to weaken the Japanese currency.

The dollar rose to 86.15 yen, its highest since mid-August 2010. It was last up 0.5 percent at 86.06 yen. Investors took out option barriers at 86 yen and stop-loss buy orders above 86.10. The yen touched its lowest level against the euro since early July. The euro hit 114.31 yen, a 17-month high. The euro traded at $1.3216, down slightly for the day and below an eight-month high of $1.3308 hit last week.

Copyright Reuters, 2012