The yen climbed across the board yesterday after gross domestic product data for the fourth quarter of 2006 showed that the economy performed well above expectations.

The dollar fell to a one month low of ¥119.77 before recovering slightly to ¥120.12 while the euro fell to ¥157.74. Both were around 0.5 per cent down over the day.

The October to December figures showed that the economy expanded 3.8 per cent, a full percentage point above market expectations, on healthy consumer spending.

"It was considerably above expectations," Masafumi Yamamoto, currency strategist at Nikki Citigroup, told Reuters. "The market showed a pretty big reaction."

"It will be a positive factor for people who want to raise interest rates, and a rise in rate rise expectations will be a reason to buy yen."

The dollar also fell as Federal Reserve chief Ben Bernanke told a congressional board that inflationary pressures in the US are easing.