By Hiroyuki Kachi
The dollar hit a one-month high against the yen in Asia on Wednesday following overnight gains in U.S. Treasury yields.
As of 0450 GMT, the dollar was at Y102.68 after reaching as high as Y102.81, its highest level since May 2. That compared with Y102.50 late Tuesday in New York, where the yield on the 10-year Treasury rose to 2.592%. Just last week the benchmark Treasury yield was down at 2.4%, its lowest level since October.
"We increasingly feel the dollar-yen is not so top heavy," said Shusuke Yamada, chief Japan FX strategist at Merrill Lynch Japan Securities. "The market sentiment has changed slightly" as shown by investors' positive response to news of progress on reforms such as a possible corporate tax cut and the investment strategy of the $1.2-trillion Government Pension Investment Fund.
Japanese stocks have made gains over the last week, although the Nikkei Stock Average was fractionally down Wednesday.
But it would be difficult to expect the dollar to break through Y103 this week in Asia without fresh cues from U.S. jobs data, giving more evidence of a stronger U.S. economy, said Mr. Yamada.
Before the jobs data comes out later this week, investors will also closely monitor the outcome of a European Central Bank meeting on Thursday amid strong expectations of further easing measures.
In other currency pair trading during Asian trading hours, the Australian dollar gained traction following better-than-expected growth readings for the nation's resource-rich economy for the first quarter of 2014. The Aussie was at Y95.18 after reaching as high as Y95.45, a three-week high, from Y94.97.
Driven by surging mining-related exports, Australia's gross domestic product grew by 1.1% in the quarter from the previous three-month period and 3.5% from the same quarter a year earlier. Analysts had forecast 1% growth on quarter and a 3.3% gain on year.
Ahead of the scheduled ECB policy meeting Thursday, the euro fell to $1.3612 from $1.3627. The common currency rose to Y139.77 from Y139.68, after touching a three-week high of Y139.97.
The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.12% at 73.51.
