Investing.com - The dollar rose to fresh eight-year highs against the yen on Tuesday after a flurry of U.S. economic reports supported the view that the Federal Reserve could start raising interest rates later in the year.
USD/JPY hit highs of 123.31, the most since July 2007 and was last at 123.23.
The dollar was boosted after upbeat data on business investment and consumer confidence indicated that the economy is recovering after suffering a sharp slowdown in the first quarter.
The Commerce Department reported that orders for long lasting manufactured goods fell 0.5% in April, but the previous month’s figure was revised up to a gain of 5.1% from 4.7%.
Core durable goods orders, which exclude transportations items, rose 0.5%, ahead of expectations for a rise of 0.4%, after a 0.6% increase in March.
Orders for non-defense capital goods excluding aircraft, a key measure of business investment jumped 1.0% from a month earlier, easily outstripping forecasts for an increase of 0.3%.
Another report showed that U.S. consumer confidence improved more than expected this month, boosted by a more positive assessment of the labor market.
The Conference Board said its index of consumer confidence rose to 95.4 from 94.3 in April, compared to forecast for a reading of 94.9.
A separate report indicated that the recovery in the housing market is gaining momentum.
Sales of new homes in the U.S rose 6.8% to an annual rate of 517,000 units in April the Commerce Department said. Economists had forecast a more modest increase of 5.0% to an annual rate of 510,000 units.
Sales of new homes in March were revised up to 484,000 units from the previously reported 481,000 units.
The greenback has strengthened across the board since Fed Chair Janet Yellen reiterated Friday that the bank still expects to start raising interest rates later this year if the economy continues to improve as expected.
Elsewhere, the euro fell to fresh one-month lows, with EUR/USD down 0.75% to 1.0895.
The single currency remained under heavy selling pressure as the prospect of a Greek default continued to weigh.
Athens has warned that the country would be unable to make a €305 million payment to the International Monetary Fund due on June 5 if a cash-for-reforms deal with its international lenders is not reached by then.
Talks between Greece and its creditors which were due to be held in Brussels on Tuesday were postponed, adding to fears that an agreement is still not close.
The greenback also extended gains against the other major currencies, with the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, up 0.86% to five-week highs of 97.30.