LONDON: The dollar hit a fresh one-month high versus the yen on Wednesday, bolstered by gains in Treasury yields, while uncertainty over a new debt deal for Greece kept the euro under a cloud. The dollar edged up 0.1 percent to 119.57 yen. As of 0533 GMT, its intraday high was 119.67 yen, the dollar’s strongest level since early January. Trade was thin with Japanese markets closed on Wednesday for a public holiday.
Helping to support the dollar was a rise in the benchmark US 10-year Treasury yield, which popped above 2 percent on Tuesday for the first time in a month on views the Federal Reserve might lift interest rates by mid-2015. The dollar’s near-term moves against the yen are likely to be driven more by Federal Reserve rate rise expectations rather than safe-haven buying of the yen, said Jesper Bargmann, head of trading for Nordea Bank in Singapore.
“Having said that, I also think there is a risk that the market may have gone in a little bit early,” he said, adding that a near-term focus would be whether the dollar manages to finish the week above 119.10 yen. Richmond Fed President Jeffrey Lacker, an inflation hawk, said on Tuesday that a June hike was an “attractive option” while San Francisco Fed President John Williams said economic conditions are “getting closer” to the point where it made sense to think about starting to normalise policy.
Also weighing somewhat on the yen, Bank of Japan Governor Haruhiko Kuroda said there was no criticism from the G20 of its aggressive easing that had driven the yen lower. Against the yen, the euro touched its highest level in about three weeks at 135.47 yen. The euro last traded at 135.34 yen, up 0.1 percent on the day. The common currency struggled to find direction against the dollar and last traded at $1.1318, steady from late US trade on Tuesday.
