Investing.com - The dollar rose to 10-week highs against the yen on Wednesday as strong gains in Asian equities markets overnight quashed safe haven demand for the Japanese currency.
USD/JPY hit 103.94, the highest level since January 23 and was last up 0.14% to 103.80.
The pair was likely to find support at 103.50 and resistance at 104.25.
Japan’s Nikkei rallied 1.04% overnight, following on from strong gains in U.S. stock markets on Tuesday, which sent the S&P index to a record closing high. Risk appetite continued to be underpinned by hopes that China will implement economic stimulus measures to shore up slowing growth.
The yen also came under pressure after Japan’s sales tax increase to 8% from 5% came into effect on Tuesday. The increase is expected to present a challenge to the Bank of Japan’s attempts to bolster economic growth and stave off deflation.
The euro rose to more than three-week highs against the yen, with EUR/JPY up 0.29% to 143.39.
The euro continued to remain supported ahead of the European Central Bank’s monthly policy meeting on Thursday, despite growing concerns over the threat of deflation in the euro area.
Data on Tuesday showed that the bloc’s manufacturing sector continued to expand last month, while a separate report showed that the euro zone unemployment rate was 11.9% in February, compared to expectations for 12.0%.
The single currency rose to one-week highs against the dollar, with EUR/USD up 0.17% to 1.3815.
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