The dollar climbed to a six-month high above ¥103 in Tokyo trading Tuesday, drawing strength from better than expected U.S. economic data and a rise in Japanese stock prices.
At 5 p.m., the dollar was quoted at ¥103.05-07, up from ¥102.52-53 at the same time Monday.
The euro stood at $1.3548-3549, down from $1.3605-3606, and at ¥139.63-64, up from ¥139.50-50.
“Speculators seem to have launched dollar purchases, taking a cue from the strength of the Nikkei 225 stock average,” a trust bank official said. On Tuesday, the Nikkei average marked its highest closing level in nearly six years.
In the afternoon, the U.S. currency rose to around ¥103.40.
The dollar’s firmness in Tokyo came after the Institute for Supply Management on Monday said the U.S. manufacturing index for November rose 0.9 point from the previous month to 57.3, the highest since April 2011 and firmer than had been forecast by market players.
The result reinforced speculation that the U.S. Federal Reserve may start reducing bond purchases designed to shore up the economy as early as December, traders said.
“Recent U.S. economic indicators have generally been strong, raising hopes for firm jobs data,” said an official of a major foreign exchange margin trading service firm.
This week, many U.S. indicators are due out ahead of the Labor Department’s release of the November jobs data on Friday.
U.S. new home sales for September and October will be released Wednesday, followed by the announcement of revised gross domestic product for July-September on Thursday.