The yen sank to a 20-year low versus the dollar on Monday as red-hot U.S. inflation data pushed up Treasury yields, eroding the support it received from rumors that Japanese authorities might intervene to strengthen the currency.

On Monday, the dollar rose 0.43 percent to 135 yen, a 20-year high, and drew closer to the 2002 high of 135.20.

Japan's government and central bank expressed alarm over the currency's recent severe declines, issuing a rare joint statement that was viewed as the strongest indication that Tokyo could intervene to defend the yen.

"Rising overseas yields and energy prices coupled with continued dovish Bank of Japan messages have pushed USDJPY to two-decade highs," Barclays analysts said.

They anticipate dollar/yen to trade between 131 and 136 this week and observe that "there are no clear thresholds above (the 2002 high) other than the round figures of 136, 137 and 138."

On Monday morning, the benchmark 10-year U.S. yield reached 3.2 percent after gaining about 12 basis points on Friday due to U.S. inflation that exceeded expectations and fueled wagers that the Fed will have to raise rates even more swiftly.