LONDON, April 28 Reuters Borrowing costs for U.S. dollars in currency derivatives markets rose sharply on Thursday after the dollar surged to within striking distance of its highest levels in two decades.

The dollar rose past the psychological level of 130 yen on Thursday for the first time since 2002, after the Bank of Japan BOJ doubleddown on its superlow yield policy, while the euro briefly fell below another symbolic mark of 1.05.

Threemonth crosscurrency swaps for eurodollar widened to their highest level since March 8 at around 19 basis points.

That translated into greater borrowing costs in U.S. dollars. Threemonth swaps now suggest that investors are willing to pay a premium of almost 19 bps to borrow U.S. dollars on Thursday, more than double of nearly 8 bps a week ago.

Reporting by Saikat Chatterjee; Editing by Samuel Indyk

Source Reuters