Forex
Investing.com -
Investing.com - The dollar rose to fresh six year highs against the yen on Thursday, as the diverging monetary policy stance between the Federal Reserve and the Japanese central bank continued to pressure the yen lower.
USD/JPY hit highs of 107.04, the most since September 2008 and was last trading at 106.92, 0.05% higher for the day and up 1.57% for the week.
Expectations that the Federal Reserve is growing closer to raising interest rates have boosted the dollar against the euro and the yen, as the European and Japanese central banks look likely to stick to a looser monetary policy stance.
A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising earlier than markets expect.
Investors shrugged off last week's disappointing U.S. nonfarm payrolls report as they began to turn their attention to the outcome of next week's Fed policy meeting.
The Fed is expected to cut its asset purchase program by another $10 billion next Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Fed Chair Janet Yellen was to hold a press conference following the meeting.
Minutes from the Fed's July meeting indicated that the central bank was shifting its monetary policy stance towards raising rates from record lows.
EUR/USD was last up 0.10% to 1.2929, holding above the 14-month lows of 1.2858 struck on Tuesday.
The euro's gains were held in check after the European Central Bank unexpectedly cut rates to record lows across the euro zone last week and unveiled new easing measures in a bid to shore up the faltering recovery and boost inflation.
Meanwhile, the euro rose to two month highs against the softer yen, with EUR/JPY up 0.16% to 138.23.
The yen remained under pressure after lackluster data on second quarter growth and the country's current account deficit earlier in the week indicated that the economy is struggling to gain momentum and fuelled expectations for more stimulus from the Bank of Japan.
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