Bets that USA borrowing costs will rise further continue to underpin the dollar, which held gains against the pound and euro. It was buying Yen114.32, up from Yen114.04 late Monday.
The dollar went up to a four-month high near ¥114.50 in Tokyo trading Tuesday, lifted by higher US long-term interest rates and a stock price rise.
U.S. dollar jumped to a two-month high against the yen the previous day.
With rate differentials in play, central banks dominate the marquee for markets this week.
YELLEN FACTOR: Traders are looking ahead to potential news out of the Federal Reserve when Yellen addresses Congress on Wednesday and Thursday.
A rate rise from Canada’s central would be its first interest rate rise in almost seven years.
The combination of data inside the June employment report, which was interpreted by markets as bullish for growth but not game-changing in terms of Federal Reserve rate hikes, added almost 100 points to the Dow Jones Industrial Average Friday and spilled over into the Asia session.
The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.008 to close at NT$30.593, as foreign investors moved funds out of the country, giving a boost to the U.S. currency, dealers said. Still, beyond that level, the pair could see much greater resistance unless U.S. growth and inflation improves materially suggesting that further tightening could take place next year.
The U.S. Federal Reserve now expects to begin shrinking its balance sheet this year if the economy evolves broadly as anticipated, the central bank said Friday in its semiannual monetary policy report to the Congress.
In fact, the buck has been held back by this shift at other banks and by a global bond selloff, particularly pronounced in Europe, where central bankers have signaled a desire to end easy-money polices.
Investors also awaited earnings due this week from big United States banks including JPMorgan Chase, Wells Fargo and Citigroup.
The dollar was softer against its United Kingdom rival. Rent-A-Center rose $1.11 to $12.21.
Still, caution surrounding the pound persists in some analysis.
BoE Deputy Governor Ben Broadbent is due to speak later in the day, giving investors a chance to hear the views of an interest-rate setter’s first public comments since a narrow vote to keep rates unchanged last month.
Investors are tending more to do carry trades in the present situation.
CURRENCIES: The dollar fell to 113.84 from 114.05 yen late Monday.