It was a mixture of historical technical levels and algorithmic trading that rocketed the yen to an all-time high of 76.25 against the dollar Thursday, according to Thanos Papasavvas, head of currency management at Investec Asset Management.
Algorithmic traders put in stop losses below the previous peak of 79.75 that was reached back in April 1995, a "very clear technical level," Papasavvas told CNBC Thursday.
"What happened was a number of stop losses were placed below that around the world – this was a level well known to everyone - with triggers that if that level starts to break, then we be selling dollar/yen across that period," he explained.
"And of course, the algorithmic trading, a lot of systematic trading, went through and it escalated to stop losses hitting more stop losses and more stop losses and that went down to 76.36."
When asked whether the jump could be blamed on algorithmic traders, Papasavvas said many people have been long the dollar/yen cross or negative yen and that it is logical for some to put in stop losses below a previous low.
"I don’t think it would be fair to try and blame speculators in terms of the yen's appreciation," he said.
Just the day before, Japanese margin traders had built up long positions in dollar/yen totaling $2.8 billion, according to the Tokyo Financial Exchange. Long positions in major currencies were reported as a record $8.25 billion.
The surge is a concern for authorities and policymakers as "the last thing that they want is an appreciating yen amidst this crisis," Papasavvas added.
"The level of the yen is not as expensive, on a relative basis, as it was back in 1995, but it is still a little bit overvalued. It is not at fair or cheap levels, and if they can add some stimulus into the Japanese economy by weakening the yen," he said.
This could be done by "by global concerted intervention," he said.
The dollar traded higher against the yen.