The dollar rose above ¥109.50 in Tokyo trading on Thursday, lifted by a hawkish statement by the U.S. Federal Reserve and a sharp rally on the Tokyo Stock Exchange.
At 5 p.m., the dollar stood at ¥109.59-59, up from ¥108.68-69 at the same time Wednesday. The euro was at $1.2403-2403, down from $1.2444-2444, and at ¥135.92-93, up from ¥135.25-26.
The dollar hovered around ¥109.20 in early trading, after attracting demand in overnight trading overseas in the wake of the Fed statement released after the two-day Federal Open Market Committee meeting.
In the statement, the Fed revised its inflation outlook upward and hinted at the possibility of considering an interest rate hike at the next FOMC meeting in March.
The dollar rose to around ¥109.40 by midmorning on buying induced by the 225-issue Nikkei average’s advance and from Japanese importers.
Following a pause in its advance, the greenback gathered steam again in the afternoon thanks to the Nikkei’s further rise.
Players with dollar-short positions moved to buybacks in view of the Nikkei’s unabated strength, a currency broker said.
In late hours, the dollar was also supported by purchases from European investors, market sources said.