The US dollar reached another multi-year high against the yen after the Federal Reserve officials started talking about impending rise in interest rates. Against the yen, the US currency had been trading at the level of 124.46, the highest level since December 2002. The yen’s decline helped the largest Japanese companies to achieve record profit levels. However, government officials, in their turn, are concerned about the Japanese currency downward pace. This dynamics was caused by combination of positive news on the US economy and a possible tightening of the Fed monetary policy. The greenback strengthened against all major currencies after the released data showed that the US inflation grew faster than economists predicted, and the unemployment rate was close to accepted levels. "It's a dollar-driven market right now, rather than a yen-focused one. Yellen made it clear that the Fed will hike rates and under such conditions the question for participants is what currency to sell. It appears that shorting the yen has gathered momentum once the dollar rose above 121 yen," Bart Wakabayashi, the head of forex at State Street in Tokyo said. Ian Stannard, a senior currency strategist at Morgan Stanley, is in agreement with this position. "I think this has turned around and the dollar is back on a bullish trend. It can now react to any positive news. Dollar yen breaking through the top of the range is an important event," Ian Stannard noted referring to the data.
