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Dollar climbs to four-year high

JIJI

The dollar temporarily rose above ¥102.50 for the first time in four years and seven months in Tokyo trading Wednesday, supported by increasing optimism about the U.S. economy.

At 5 p.m., the dollar was quoted at ¥102.35-43, up from ¥101.37-38 at the same time Tuesday. The euro was at $1.2902-2903, down from $1.3000-3000, and at ¥132.10-12, up from ¥131.79-80.

The dollar rose to a high around ¥102.60 in late trading, a level unseen since October 2008, after making narrow movements slightly above ¥102.00 for much of Tokyo trading hours Wednesday.

The developments came after the U.S. currency climbed to ¥102.44 in New York on Tuesday on the back of rosy views on the U.S. economy following recently released strong economic data, traders said.

In Tokyo, the dollar temporarily faced profit-taking and real demand-backed sales. But the currency also received support from buybacks.

In late afternoon trading, the dollar broke through the ¥102.50 line after the announcement of weaker than expected German gross domestic product data, the traders said.

Germany’s real GDP expanded 0.1 percent during January-March, the German government said, also revising down the October-December result to a drop of 0.7 percent from a fall of 0.6 percent.

The attention of market players then shifted to U.S. data due out later Wednesday, such as producer prices and industrial output for April, and home builder confidence data for May, the traders said.

These indicators are drawing attention because they will provide important clues to the course of the U.S. economic recovery.