The dollar hit its highest since December 2002 against the yen on Thursday due to expectations that US interest rates will rise later this year, while the Australian dollar struck a six-week low following disappointing capital expenditure data.

The greenback soared as high as 124.30 yen, and last stood at 124.15 yen.

“Macro funds betting on a September Fed rate hike have increased their long exposure to the dollar, which was the main driving force behind the rise this week,’’ said Yunosuke Ikeda, head of FX strategy at Nomura Securities, which has many hedge fund clients.

BoJ monetary stimulus

In addition, a rise in Tokyo stocks also helped to boost the risk appetite and hurt the safe-haven yen, which has been under pressure also from the Bank of Japan’s aggressive monetary stimulus since 2013.

“Longer-term, little stands in the way of further JPY losses,’’ said Greg Moore, senior currency strategist at RBC.

But traders added that players are now wary of potential verbal intervention by Japanese officials to steady the yen.

On Wednesday, Japanese policymakers had cautioned markets against pushing the yen down too rapidly.

G7 meet

Finance ministers and central bankers from the Group of Seven industrialised nations will discuss the recent foreign exchange movements when they meet in Germany this week, a senior Canadian official had said on Monday.

Nomura’s Ikeda said he doubts if the dollar/yen pair will test the 125 yen-mark anytime soon. “I expect hedge funds will lock in profits before next week’s US payroll report (due on Friday next week).’’

Greece debt agreement

The dollar, however, shed some ground against the euro amid tentative hopes that cash-strapped Greece may be nearing a deal to secure fresh funding.

The euro bounced off a one-month low of $1.0819 to reach $1.0911, snapping a recent string of falls.

The Greek government said on Wednesday it is starting to draft an agreement with its euro zone partners and the International Monetary Fund that would pave the way for aid.

However, European officials have dismissed this as wishful thinking. German Finance Minister Wolfgang Schaeuble said he was surprised by the upbeat tone from some Greek government officials.

Still, the steadier euro saw the dollar index dip to 97.274, from a one-month peak of 97.775.

Among commodity currencies, the Australian dollar skidded more than half a US cent after weaker-than-expected business investment figures fuelled expectations for more easing by the Reserve Bank of Australia.

The Aussie fell to $0.7671 from $0.7755 before the data, hitting its lowest level in six weeks.

The New Zealand dollar fared better after the country’s dairy co-operative Fonterra said it expected global demand for dairy products to eventually recover.

The kiwi dollar changed hands at $0.7235, down 0.3 per cent on the day.

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