Forex - Dollar rises to 5-week highs vs. yen

The dollar rose to five-week highs against the yen on Wednesday, boosted by expectations that the Federal Reserve will start to unwind its bond buying program by the end of the year.

USD/JPY hit 100.86 during late Asian trade, the pair’s highest since May 31; the pair subsequently consolidated at 100.74, easing up 0.13%.

The pair was likely to find support at 99.50, Tuesday’s low and resistance at 101.27, the high of May 31.

Demand for the dollar continued to be underpinned after economic data releases earlier in the week underlined the view that the stronger U.S. economy will see the Fed start to taper asset purchases later this year.

Data on Tuesday showed that U.S. factory orders rose slightly more than expected in May. On Monday, a report showed that the Institute of Supply Management’s manufacturing index was higher in June, recovering from an unexpected contraction in May.

Investors were looking ahead to Friday’s U.S. nonfarm payrolls data, for further clues on when the Fed may decide to unwind its USD85 billion-a-month stimulus program.

The yen was fractionally lower against the euro, with EUR/JPY inching up 0.06% to 130.65.

The U.S. was to release the ADP report on nonfarm payrolls later Wednesday, as well as the weekly government report on initial jobless claims and data on the trade balance. In addition, the ISM was to produce a report on U.S. service sector activity.