The dollar was higher against its rivals in Asian trade Wednesday, hitting another, nearly six-year high in against the yen on expectations that the U.S. Federal Reserve will provide a clearer picture on the likelihood of an interest-rate hike. Ahead of next week's FOMC policy meeting, the dollar USDJPY, +0.49% chalked up another fresh high against the Japanese currency, reaching ¥106.52 in mid-afternoon, its highest since October 2008. The greenback was at ¥106.42 compared with ¥106.20 late Tuesday in New York. The euro EURUSD, +0.00% was lower at $1.2926 from $1.2937. The Australian dollar AUDUSD, -0.84% was at $0.9167 against $0.9203 after touching a low of $0.9157, the weakest since March. The greenback kicked off Wednesday's session on a weak tone, as a fall in the Nikkei Stock Average prompted investors to lock in profits after the dollar's recent rally. But Japanese importers moved in to buy dollars in mid-morning for regular settlement of business transactions, while the stock market gave the dollar another lift at midday. The benchmark Nikkei NIK, +0.25% was up 0.1% at 15,769.74 midday after staying in negative territory earlier in the session. "It's natural to see profit-taking" as the dollar continues to chalk up six-year highs against the yen, said Yuzo Sakai, manager of FX business promotion at Tokyo Forex Ueda Harlow. But the dollar is "strong enough to rebound even after a fall, a sign of how investor hopes are building for the FOMC meeting." Investors showed a muted reaction to comments by a senior Bank of Japan official earlier Wednesday. Deputy Gov. Kikuo Iwata said the central bank can reach its 2% inflation target by taking appropriate monetary policy steps, downplaying the view that the central bank is relying on a weaker yen to attain its goal. Mr. Iwata defended the more aggressive easing approach rolled out in April 2013, saying it has produced the intended effects on prices and the economy. "The current round of inflation hasn't been brought about merely by the depreciation of the yen," Mr. Iwata told business leaders in the city of Kanazawa, northwestern Japan. The dollar's strength has become increasingly clear, making it easier for investors to buy, said Shusuke Yamada chief Japan FX strategist at Merrill Lynch Japan Securities. While "it won't be a surprise" if the dollar tests the lower half of ¥107 later this week, the greenback is still vulnerable to profit-taking, said Mr. Yamada. But the dollar will likely be well-supported if it breaks below ¥106, he said. In other currency trade, the euro EURJPY, +0.57% was at ¥137.57 from ¥137.41. The WSJ Dollar Index BUXX, +0.26% a measure of the dollar against a basket of major currencies, was up 0.12% at 76.09. Source: MarketWatch
