The dollar hit a two-week high versus the yen on Thursday, extending its gains after strong US economic data bolstered expectations for a solid US jobs report later this week.
The dollar rose to as high as 110.545 yen, its strongest level since August 16. It last changed hands at 110.51 yen, up 0.2 per cent from late US trade on Wednesday.
The greenback gained a lift after the Commerce Department had said on Wednesday that its second estimate of US gross domestic product showed that the economy grew at an annual 3.0 per cent annual in the second quarter, the quickest in more than two years.
In addition, the ADP National Employment Report showed US private-sector employers hired 237,000 workers in August for the biggest monthly increase in five months, driving expectations for a solid US August non-farm payrolls figure.
Fed rate hike prospects
In the wake of such solid economic indicators, market expectations for the chances of a Fed rate hike in December may start to increase and support the dollar, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.
“I think the market is starting to think that eventually the wage growth component is going to start to kick in,” Innes said, adding that the dollar may attract demand ahead of the US non-farm payrolls data due on Friday.
The euro nursed its wounds after falling 0.7 per cent against the dollar on Wednesday in its biggest daily percentage drop against the dollar in nearly four weeks.
The euro edged up 0.1 percent on the day to $1.1890, having retreated from a more than 2-1/2 year high of $1.2070 set on Tuesday.