Investing.com - The dollar moved higher against the yen on Monday, to trade at 12-year highs following the release of upbeat U.S. economic reports on manufacturing activity and construction spending.
USD/JPY hit session highs of 124.34, not far from the 12-year peaks of 124.45 set last Thursday, up from around 124.02 ahead of the data.
The dollar was boosted after the Institute of Supply Management’s manufacturing index accelerated in May, as new orders and employment both rebounded.
The ISM index of manufacturing activity was 52.8, up from 51.5 in April and ahead of forecasts for 52.0.
The employment index rose from 48.3 in April to 51.7 in March, while new orders were up from 53.5 to 55.8.
Another report showed that U.S. construction spending rose to the highest level in six-and-a-half years in April, adding to recent signs that the economy is rebounding from a weak first quarter.
The Commerce Department said construction spending jumped 2.2% to an annual rate of $1.0 trillion, the highest since November 2008.
Earlier in the day, official data showed that U.S. consumer spending was unexpectedly flat in April following a 0.5% increase in March.
Demand for the dollar continued to be underpinned by expectations for an initial rate hike by the Federal Reserve later this year.
The dollar was also higher against the euro, with EUR/USD down 0.73% to 1.0908.
The euro remained under pressure amid concerns over the lack of an agreement between Greece and its international creditors on economic reforms needed to unlock additional bailout funds.
Greece is due to make a €305 million payment to the International Monetary Fund on June 5.
Athens warned last month that it will be unable to make the repayment if a cash-for-reforms deal with its creditors is not reached by then.
Meanwhile, data on Monday showed that the euro zone manufacturing sector posted modest growth in May.
The euro zone manufacturing PMI came in at 52.2, unchanged from March’s final reading and a 10-month high, but down slightly from the preliminary estimate of 52.3.
Weakness in the region’s core economies persisted, with France’s manufacturing sector still in decline and Germany registering only modest growth.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.66% to 97.59, not far from the five week highs of 97.88 hit last Wednesday.