Investing.com - The dollar rose more than 1% against the yen on Monday after Japan's finance minister warned that Tokyo was prepared to intervene in the foreign exchange market if necessary, while the euro was little changed against the greenback.
hit highs of 108.60, the most since April 29 and was last at 108.42 up 1.2% for the day.
The dollar had fallen to 18-month lows of 105.05 against the yen last week.
Japan's Finance Minister Taro Aso said Monday that Tokyo is ready to intervene in the currency market if excessive moves in the yen are enough to affect Japan's trade, economic and fiscal policies.
The yen initially showed little reaction to the comments amid the view that Japanese officials are unlikely to take steps to weaken the currency in the absence of support for such a move.
Late last month the U.S. Treasury Department added Japan to a watch list of countries it is monitoring to gauge whether their foreign exchange policies provide an unfair trade advantage.
In its report, the Treasury noted that the current dollar-yen market was "orderly" and reiterated all countries must abide by G20 and G7 commitments on exchange rate policies, widely seen as a call for Japan to limit foreign exchange interventions.
Aso said Monday the Treasury's move to put Japan on a watch list "won't constrain" Tokyo's currency policy.
The yen has strengthened broadly since the Bank of Japan held back from implementing fresh stimulus measures at its April meeting, defying market expectations for further easing.
The strong yen is posing a challenge to the BoJ's attempts to spur price growth.
Demand for the dollar was also underpinned after said Friday that it was reasonable to expect two rate hikes this year, despite data showing that in April.
The yen was also sharply lower against the euro, with rallying 1.11% to 123.50.
The single currency was little changed against the dollar, with at 1.1396.
In the euro zone, data on Monday showed that improved slightly in May, but concerns over the outlook for the global economy continued to weigh.
The rose to 6.2 from 5.7 in April, compared to expectations for a reading of 6.1.
A separate report showed that rose by a larger than forecast 1.9% in March, the largest increase since June, boosted by strong foreign demand.
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