The dollar advanced against the yen on Tuesday to re-approach the highest level since October 2008, after stronger-than-expected U.S. durable goods data added to signs the economy will be strong enough to allow the Federal Reserve to continue withdrawing support through 2014.
USD/JPY was down 0.19% to 104.31 during U.S. morning trade after rising as high as 104.42 earlier. The pair rose to a five-year high of 104.62 on December 20.
The pair was likely to find support at 103.76, the low from December 23 and resistance at 104.62, the high from December 20.
Demand for the greenback remained supported amid indications of an improving U.S. economy. The Commerce Department said earlier that total durable goods orders increased by 3.5% in November, easily surpassing expectations for a 2% gain.
Core durable goods orders, excluding volatile transportation items, climbed by a seasonally adjusted 1.2% in November, above forecasts for a 0.6% increase.
Orders for core capital goods, a key barometer of private-sector business investment, surged 4.5% last month, blowing past expectations for a 0.7% gain.
Shipments of core capital goods, a category used to calculate quarterly economic growth, advanced 2.8% in November, significantly higher than expectations for a 1% gain.
The dollar strengthened broadly last week after the Fed announced that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January.
Elsewhere, the euro was lower against the dollar, with EUR/USD falling to lows of 1.3673. The pair was last down 0.16% to 1.3676.
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