After gaining 0.3 per cent on Wednesday, the euro rose 0.1 per cent in Tokyo to $1.2617 or 98.90 yen as of 11:04 a. m. today, toward a two-month high against the US dollar, thanks to optimism that the European Central Bank (ECB) will today announce more aggressive measures to fix the region's debt crisis.

ECB chief Mario Draghi is expected to announce unrestricted, sterilized bond buying on Thursday. The process of sterilization involves draining money from other sections of the financial system to counterbalance new funds added.

The euro enjoyed gains following two central bank officials revealed that Mr. Draghi was in favor of such a plan. The 17-nation currency has gained 0.8 per cent in the previous week, and emerged as the biggest gainer among the ten developed-nation currencies. The yen and US dollar gained 0.1 per cent and 0.2 per cent respectively.

The Australian dollar also rallied from near a seven-week low after the country's official data showed unexpected fall in unemployment. The Aussie dollar gained 0.3 per cent to $1.0224 from, from $1.0167 on Wednesday. The rate of unemployment in Australia declined from 5.2 per cent in July to 5.1 per cent in August.

Sydney-based currency strategist Emma Lawson, of National Australia Bank Ltd., said, "The market is pleased by the fact that we have some details and that the ECB is going to follow through with what was hoped that they would do."

Two people familiar with the ECB plan said that the central bank would concentrate on government bonds rather than a broad range of assets and would target maturities of up to three years.