The dollar firmed against the yen on Wednesday after industry data revealed the U.S. private sector added more payrolls in December than anticipated.
In U.S. trading, USD/JPY was up 0.24% and trading at 104.85.
The dollar firmed after payroll processor ADP reported that private-sector nonfarm payrolls rose by 238,000 in December, surpassing consensus forecasts for an increase of 200,000. November’s figure was revised up to a gain of 229,000 from a previously reported increase of 215,000.
The numbers fueled hopes that the official December jobs report due out on Friday will meet or beat expectations as well.
The Federal Reserve has said it will pay close attention to indicators when deciding the fate of its USD75 billion monthly bond-buying program, and Wednesday''s data fueled expectations for the U.S. central bank to scale down purchases even further this year.
Fed bond purchases aim to prop up the economy by suppressing long-term borrowing costs, weakening the dollar as a side effect as long as they remain in effect.
Elsewhere on Wednesday, the Federal Reserve released the minutes of its December policy meeting that revealed most monetary authorities felt January was the right time to trim its monthly bond-buying program to USD75 billion from USD85 billion, which also gave the greenback some support.
"Many members judged that the Committee should proceed cautiously in taking its first action to reduce the pace of asset purchases and should indicate that further reductions would be undertaken in measured steps," the minutes read.
"Members also stressed the need to underscore that the pace of asset purchases was not on a preset course and would remain contingent on the Committee''s outlook for the labor market and inflation as well as its assessment of the efficacy and costs of purchases."
The yen, meanwhile, was up against the euro and down against the pound, with EUR/JPY trading down 0.08% at 142.30, and GBP/JPY trading up 0.49% at 172.39.
On Thursday in the U.S., the Labor Department is to release its weekly report on initial jobless claims.
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