The dollar has risen steadily against the yen in recent weeks and now appears poised to test its April 2 high of 126.84 yen.
Although some market participants remain fearful of China reiterating its strong opposition toward a weakening of the yen, as it did in April, their concerns appear to be groundless.
Other Asian currencies have sunk against the dollar alongside the Japanese currency, allowing Chinese products to stay competitive on export markets.