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HomecurrenciesDollar hits 12-1/2-year peak vs yen before retreating

Dollar hits 12-1/2-year peak vs yen before retreating

The dollar climbed to a 12-1/2-year high against the yen on Thursday before pulling back as investors bet that U.S. interest rates will rise later this year while Japan's monetary policy remains ultra-loose.

The latest data on U.S. jobless claims and pending home sales supported expectations that the Federal Reserve is moving toward raising rates by year-end, analysts said.

"The tone in U.S. economic numbers is improving. This reminds investors U.S. rates are moving up later this year and has revived the dollar's appeal since last week," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.

The greenback gave back much of its gain in U.S. afternoon trading after Japanese Finance Minister Taro Aso said the yen's recent drop had been "rough," stirring expectations that the Bank of Japan may intervene to stem further decline in the currency.

Aso was speaking to reporters at a meeting of top finance officials from the Group of Seven (G7) nations in Dresden, Germany.

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