The yen dropped to multi-year lows against the U.S. dollar and euro on Tuesday, keeping investors on heightened Japanese intervention watch ahead of this week's Bank of Japan policy meeting.The euro reached 165.71 yen, its highest since 2008, after data showed business activity in the euro zone expanded at its fastest pace in nearly a year, primarily due to a recovery in services. Europe's common currency was last up 0.4% at 165.67 yen .The dollar rose as high as 154.88 against the yen , a 34-year peak and edging closer to 155, a level seen by market participants as the new trigger for Japanese intervention.The greenback was last little changed on the day at 154.79 yen.apan's central bank is expected to forecast that inflation will stay around its 2% target for the next three years in a new estimate due on Friday, signalling its readiness to cautiously raise interest rates again this year from near-zero levels.