Investing.com - The dollar rose to the highest level in ten weeks against the yen on Wednesday as market sentiment continued to remain supported by hopes that China will implement economic stimulus measures to shore up growth.
USD/JPY hit 103.94, the highest level since January 23 and was last up 0.14% to 103.80.
Japan’s Nikkei 225 rallied 1.0% overnight, curtailing safe haven demand for the yen. The Nikkei’s gains followed strong gains in U.S. stocks on Tuesday, which sent the S&P 500 index to a record closing high.
The yen also came under pressure after Japan’s sales tax increase to 8% from 5% came into effect on Tuesday. The increase is expected to present a challenge to the Bank of Japan’s attempts to bolster economic growth and stave off deflation.
The euro was steady against the dollar, as traders remained cautious ahead of Thursday’s European Central Bank meeting, amid growing concerns over the threat of deflation in the euro zone.
EUR/USD edged up 0.04% to 1.3798, after rising as high as 1.3820 earlier.
The pound pushed higher against the dollar, with GBP/USD edging up 0.12% to 1.6646, while USD/CHF was unchanged at 0.8835.
The Australian dollar edged lower, with AUD/USD dipping 0.07% to 0.9241 after data showed that Australian building approvals fell 5% in February, ahead of expectations for a 2.5% drop.
NZD/USD was down 0.49% to 0.8595, extending its pullback from the two-and-a-half year peaks of 0.8696 struck on Tuesday, as investors took profits.
Meanwhile, USD/CAD edged down 0.04% to 1.1020.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.06% to 80.20.