Dollar steady as yields rise, euro lifted by calls for less bond purchases

The dollar rose to its highest level in about two weeks versus the yen on Thursday, bolstered by this week's rise in U.S. bond yields. As the market shifts its attention to who will be the next Federal Reserve chair and this weekend's Japanese election, the greenback was slightly higher against its major rivals despite slipping against the euro.

USD/JPY reached as high as 113.14 in Asian trade, its strongest level since Oct. 6. This week's rise in U.S. bond yields helped lend support to the greenback. Participants expect the dollar's rise against the yen to ease as uncertainty kicks in ahead of this weekend's election in Japan, despite most polls showing Japanese Prime Minister Shinzo Abe's coalition on track to secure a roughly two-thirds majority in Sunday's general election.

As the Federal Reserve is widely expected to lift interest rates for the third time this year in December, markets are eyeing clarity on who will lead the U.S. central bank after Fed Chair Janet Yellen's term expires next February. President Donald Trump will announce his decision on who will be the chair of the Federal Reserve in the "coming days," White House spokeswoman Sarah Sanders said on Wednesday.

The dollar was buoyed this week by the emergence of Stanford University economist John Taylor as a major candidate for the next Fed chair.

EUR/USD climbed above 1.18 to 1.1822 as the European Central Bank meeting next week comes into focus. France’s central bank governor called on policymakers to start winding down on bond purchases as inflation rises.

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