Investing.com - The dollar rose to a more than three-week high against the yen on Friday, as upbeat U.S. economic data underlined expectations that the Federal Reserve will start raising interest rates later this year.
USD/JPY hit highs of 124.23, the most since June 24, before turning modestly lower in late trade to end at 124.06, down 0.07% for the day. The pair still ended the week with gains of 1.08%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.3% to end at 98.09 late Friday, the strongest level since April 23.
For the week, the index rose 1.9%, the biggest weekly gain since May, amid growing indications that a rate hike is coming in the U.S. later this year.
Data on Friday showed that U.S. consumer prices rose 0.3% in June, the fifth consecutive monthly increase, while core prices, which exclude food and energy, increased 0.2% last month, adding to signs of firming inflation.
A separate report showed that U.S. housing starts surged 9.8% to 1.174 million units in June. Analysts had expected housing starts to increase by 6.2% last month.
Meanwhile, U.S. building permits jumped 7.4% to 1.343 million units in June, the most since July 2007, pointing to a rapidly strengthening housing market.
Federal Reserve Chair Janet Yellen said earlier in the week that the central bank was on track to raise interest rates by the end of the year if the economy continues to grow as expected.
In Japan, the Bank of Japan voted 8 to 1 as expected on Wednesday to keep monetary policy steady.
Elsewhere, the yen ticked up against the euro on Friday to hit the strongest level since July 10. EUR/JPY dipped 0.47% to 134.37 in late trade.
Germany's parliament approved a government request to open talks on a much-needed bailout program for Greece on Friday, which could provide Athens with up to €86 billion over a period of three years.
Also Friday, the European Union agreed to give Greece a €7.16 billion bridging loan from the European Financial Stabilization Mechanism (EFSM) to keep its finances afloat until a bailout is approved.
The news came after the ECB increased its emergency lending to Greek banks by €900 million, which would allow them to reopen after being closed for nearly three weeks.
In the week ahead, market players will focus on U.S. data on home sales and jobless claims for further indications on the strength of the economy and the timing of an interest rate hike.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday as there is no relevant data on this day.
Monday, July 20
Markets in Japan will remain closed in observance of Marine Day.
Wednesday, July 22
The U.S. is to release private sector data on existing home sales.
Thursday, July 23
Japan is to produce a report on the trade balance.
Later Thursday, the U.S. is to report on initial jobless claims.
Friday, July 24
Japan is to publish preliminary data on manufacturing activity.
The U.S. is to round up the week with reports on manufacturing activity and new home sales.