The Yen fell to new multi-year lows against the Euro and Dollar on Tuesday, prompting investors to closely monitor potential interventions ahead of the Bank of Japan's meeting this week.

Meanwhile, cautious comments from policymakers kept Sterling near its lowest levels in months.

The Euro surged broadly following stronger-than-expected business activity data in France and Germany, reaching 165.62 Yen, its highest level since 2008, Reuters reports.

"That's a combination of the stronger Euro today, with the services data moving back into expansionary territory, an encouraging sign that the headwinds to growth for consumer spending are continuing to fade, and the Yen continuing to weaken on the expectation that the BOJ will be very gradual in tightening policy," stated MUFG senior currency strategist, Lee Hardman.

Meanwhile, the dollar edged up to 154.87 Yen, a high not seen since 1990, and moved nearer to the 155-mark, which was deemed by many as the new trigger for authorities' intervention.

Furthermore, Japanese Finance Minister Shunichi Suzuki stated that last week's meeting with his US and South Korean counterparts had set the stage for Tokyo to take action against excessive Yen movements, marking the strongest warning yet regarding the possibility of intervention. 

That said, doubts remain as to whether Tokyo will act so close to the central bank's upcoming meeting that gets underway on Thursday.

Japan's central bank is anticipated to forecast that inflation will remain around its 2% target for the next three years in new projections to be released on Friday, indicating its readiness to gradually raise interest rates again this year from their current near-zero levels.

"We've had jawboning now for a number of weeks, and they still haven't come in and intervened directly in the FX market. So people are questioning what's going to bring them to the table," Hardman added.

The Euro gained against more than just the struggling Yen, rising 0.2% against the dollar to $1.06753, having stabilised after earlier losses in the month.

The single currency also gained 0.16% against the Pound, reaching 86.39 pence, briefly matching the previous day's four-month top of 86.43 pence, following the release of German PMI data.