The dollar rose against the yen on Thursday, staying close to 6-month highs after the new economic data reaffirmed expectations of two further rate hikes before the end of the year. Wednesday's reports showed that producer prices in the United States exceeded expectations for June, registering the largest annual increase in 6½ years. The yen was also pressured by the divergence of monetary policy between the Federal Reserve and the Bank of Japan and the distance between the Bank of Japan's 2 percent inflation target and current inflation levels.
On Wednesday, the dollar broke the 112 barrier against the yen for the first time since January 10. The dollar rose as much as 1.3 percent on Wednesday to a maximum of 112,175 yen. The pair's move was a surprise to traders who previously relied on the yen as a safe haven amid continuing trade tensions between the United States and China. At 10:00 am HK / SIN, the dollar traded up 0.21 percent to 112.24.
On Thursday, the euro was trading relatively unchanged, rising a modest 0.04 percent against the dollar, to $ 1.1674 in early trade and rising 0.09 percent against the pound sterling. European stocks broke their 6-day winning streak on Wednesday as commercial fears scared traders despite expectations of a strong profit season. All European sectors were in red. Wall Street indices followed the downward trend, although Asian stocks on Thursday rose sharply.
The Nikkei 225 rose 1.22 percent at the start of the trading session and the Shanghai compound rose 1.11 percent. Hong Kong's Hang Seng index rose 0.19 percent, Kospi gained 0.40 percent and ASX rose 0.73 percent.