Investing.com - The dollar rose to fresh six year highs against the yen on Wednesday as heightened expectations for an early hike in U.S. interest rates continued to underpin demand for the greenback.
USD/JPY touched highs of 106.54, the most since September 2008, and was last up 0.26% to 106.46.
The pair was likely to find support at the 106.00 level and resistance at around 107.25.
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.
The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising earlier than markets expect.
Weak economic data from earlier in the week also continued to weigh on the yen.
Data on Monday showed that Japan’s second quarter economic contraction was larger than initially estimated, and another report showed that the country’s current account surplus fell short of expectations in July.
The lackluster data indicated the economy is struggling to gain momentum and fuelled expectations for more stimulus from the Bank of Japan.
The euro edged lower against the dollar, with EUR/USD dipping 0.07% to 1.2929, holding above the 14-month lows of 1.2858 set on Tuesday.
The euro remained weaker 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.