Yen hits two-year low on borrowing plans The yen remained under pressure on Thursday, falling to a two-year low against the dollar, after Japan's new finance minister signalled a rise in borrowing. Taro Aso, who was appointed finance chief following the inauguration this week of prime minister Shinzo Abe, announced on Wednesday that he would issue bonds beyond the Y44tn debt cap set by the previous administration. The dollar climbed 0.3 per cent to Y85.74 - having hit a two-year high of Y85.87 during Asian trade. The euro gained 0.6 per cent to a 16-month high of Y113.79 and sterling added 0.5 per cent to Y138.64. "The yen is weakening on further tough talk from the incoming administration, hitting levels last seen after the bout of Bank of Japan intervention in late 2010," said Simon Smith at FxPro. Sterling fell to an eight-month low against the euro after data showed disappointing lending figures released by the British Bankers' Association. The data showed that consumer appetite for borrowing has remained subdued, while net lending to non-financial companies fell £3.1bn in November. "The sharp drop in lending indicates that the Funding for Lending Scheme is yet to have any positive impact in actually lifting bank lending to companies," said Howard Archer at IHS Global Insight. The euro climbed 0.2 per cent to £0.8316 against the pound. The dollar remained under pressure, however, as there was still no progress on talks to resolve the fiscal cliff of tax increases and spending cuts that threaten to return the US economy to recession in 2013. On a trade weighted basis set against a basket of other leading currencies, the dollar index fell 0.3 per cent to 79.43. The dollar also fell against the euro and sterling - down 0.3 per cent to $1.3263 and 0.2 per cent to $1.6171 respectively.