LONDON: The dollar hovered near a one-month high versus the yen on Wednesday, bolstered by gains in Treasury yields, while uncertainty over a new debt deal for Greece kept a cloud over the euro.
The dollar inched up 0.1 percent to 119.51 yen, staying near Tuesday’s peak of 119.62 yen, which was the dollar’s highest 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 U.S. 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 may see further gains versus the yen in the near term, supported by expectations for the Fed to start raising interest rates later this year, said Jesper Bargmann, head of trading for Nordea Bank in Singapore.
“I think the driver of dollar/yen is going to be more expectations of the next Fed hike than it’s going to be safe haven buying of the yen on the situation in Europe,” Bargmann said.
“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.
