The dollar scaled a
fresh 12-1/2 year high against the yen on Tuesday, breaching a key
threshold along the way as it extended a strong run after upbeat U.S.
data.
Dollar bulls
latched onto a survey showing a pick up in U.S. manufacturing activity
and construction spending that pushed Treasury yields higher, while
discounting less upbeat data on consumer spending.
The U.S. currency popped above 125.00 yen JPY= for the first time since late 2002. It has since eased back to 124.64 from a high of 125.07.
"The rise by the dollar against the yen has been steep but sentiment favors testing new highs rather than consolidating," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.
Muted comments by Japanese officials on the yen's weakness did little to dent the dollar's momentum.
Bank
of Japan Governor Haruhiko Kuroda told reporters after a meeting with
Prime Minister Shinzo Abe that it was important for currency rates to
reflect economic fundamentals, but made no attempt to talk up the yen.
Finance Minister Taro Aso was equally tight-lipped, saying only that he will watch forex moves carefully.
Momentum turned bullish for the dollar after it cracked a double-top resistance around 122.00 yen last week, and it has not looked back since.
"There were option barriers at 125 yen, which some players tried taking out yesterday but failed under defensive fire. But they succeeded today," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm.
The next chart hurdle is seen around 125.65-125.73, an area that capped the dollar back in the final months of 2002.
"Despite the speed of the move, we are not looking to fade it – our end year target is still 132," said Elsa Lignos, a senior currency strategist at RBC Capital Markets.
The U.S. currency popped above 125.00 yen JPY= for the first time since late 2002. It has since eased back to 124.64 from a high of 125.07.
"The rise by the dollar against the yen has been steep but sentiment favors testing new highs rather than consolidating," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.
Muted comments by Japanese officials on the yen's weakness did little to dent the dollar's momentum.
Finance Minister Taro Aso was equally tight-lipped, saying only that he will watch forex moves carefully.
Momentum turned bullish for the dollar after it cracked a double-top resistance around 122.00 yen last week, and it has not looked back since.
"There were option barriers at 125 yen, which some players tried taking out yesterday but failed under defensive fire. But they succeeded today," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm.
The next chart hurdle is seen around 125.65-125.73, an area that capped the dollar back in the final months of 2002.
"Despite the speed of the move, we are not looking to fade it – our end year target is still 132," said Elsa Lignos, a senior currency strategist at RBC Capital Markets.
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