The U.S. dollar touched a six-week peak versus the yen on Tuesday as forex traders dismissed sour U.S. economic data and anticipated that the Federal Reserve would prepare markets for an interest rate increase in June in its Wednesday statement.
USD/JPY hit 112.30, its highest since March 21, despite data on Monday showed sluggish U.S. factory activity and inflation. Last week's release of U.S. first-quarter gross domestic product showed the weakest performance in three years.
The weakness in U.S. economic data has not wavered expectations that the Fed will raise interest rates in June, market participants have said. That, in turn, has lifted the dollar against the yen and kept it relatively stable against the euro.
EUR/USD stayed mostly flat above 1.09. The dollar was last up 0.24 percent against the yen at 112.10 yen, not far from its six-week high.
Together with the Fed statement, investors are awaiting Friday's U.S. April non-farm payrolls report from the U.S. Labor Department. Analysts predict U.S. employers to have added 185,000 jobs last month, up from March's 98,000.
Optimism for Friday's jobs data and the likelihood that the Fed on Wednesday would prepare markets for rate increases boosted the dollar against the yen.
