LONDON: The dollar hit a two-month high versus the yen on Wednesday after strong housing data offered signs that the U.S. economy may be recovering from a weak first quarter.
The dollar rose as high as 120.98 yen, its strongest level since March 20, before paring some of the gains to trade at 120.86 yen, up 0.1 percent on the day.
Data on Tuesday showed U.S. housing starts jumped to their highest in nearly 7-1/2 years in April and building permits soared.
After retreating broadly in recent weeks on doubts about the pace of the U.S. recovery, the dollar has regained some ground this week, especially with the euro and sterling encountering renewed selling.
The dollar was also looking better positioned against the yen on technical charts, having risen above trendline resistance near 120.30 yen on Tuesday.
“There are (dollar) offers all the way up … but we see a grind higher now to 122/123,” said Jeffrey Halley, a currency trader for Saxo Capital Markets in Singapore.
