The dollar strengthened to move in the higher ¥110 range in Tokyo trading Thursday, in the wake of a spike in U.S. long-term interest rates after the Federal Reserve’s policy-setting meeting.

At 5 p.m., the dollar stood at ¥110.59, up from ¥109.93 at the same time Wednesday. The euro was at $1.1954, down from $1.2132, and at ¥132.20, down from ¥133.38.

The dollar jumped into ¥110.70 terrain in overnight trading and rose further in the early morning, to levels above ¥110.80.

Dollar-buying was sparked by a sharp rise in the 10-year Treasury yield that came after the Fed at the two-day Federal Open Market Committee meeting moved up the timeline for tightening by at least one year to 2023 and started discussions about quantitative easing tapering, traders said.

The greenback, however, came under selling pressure later in the morning following a downturn in the key U.S. long-term interest rate in off-hours trading and the Nikkei stock average’s tumble.

In the afternoon, the dollar searched for direction while fluctuating in a range around ¥110.65.

“It was surprising” that the Fed forecast two interest hikes in its “dot-plot” projections, a currency broker said.

The Fed meeting was “more hawkish than expected,” other market sources said.

Meanwhile, a Japanese think tank official said the dollar is expected to rise only moderately because the low interest rate environment will continue for the time being.

The Fed chief noted that it is premature to start tapering, the official pointed out.

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