New York - The dollar dipped against the yen on Thursday after climbing to a four-year high just shy of the 100 mark as the Bank of Japan's new aggressive monetary policy weighed on the yen.

The dollar bought 99.73 yen around 21h00 GMT, slightly less than the 99.76 yen it fetched at the same time on Wednesday.

Earlier in the day, the greenback hit 99.95 yen, closing in on the 100 yen level it last reached in mid-April 2009.

“The Japanese yen trades within a hair's width of the critical 100-yen mark against the US dollar, and recent market moves emphasise that traders should not fight the Bank of Japan,” said David Rodriguez, quantitative strategist at DailyFX.

The dollar has surged against the yen since the BoJ announced last week it would launch a massive bond-purchase programme, or quantitative easing, to spur growth in the tepid Japanese economy.

Rodriguez pointed out that Japanese capital chasing higher yields abroad were expected to continue driving the dollar, euro and other major currencies “to fresh peaks against the downtrodden yen”.

The euro rose against the Japanese currency, trading at 130.68 yen, up from 130.37 yen late on Wednesday.

“In Europe, traders were encouraged by strong demand for Italian debt, as a successful auction saw borrowing costs for the politically deadlocked nation improve,” said Ryan Miller, market analyst at Western Union Business Solutions.

The dollar fell against the Swiss currency to 0.9308 francs from 0.9323 francs late on Wednesday.

It also weakened against the British pound, which bought $1.5384 compared with $1.5326 a day earlier. - Sapa-AFP