Investing.com - The dollar moved higher against the yen on Monday, while the euro pulled back from almost two year lows after a report showing German business climate improved this month for the first time since April.
USD/JPY edged up 0.11% to 117.90, holding below the seven-year peaks of 118.96 reached last Thursday.
The pair slid lower on Friday after Japan’s Finance Minister Taro Aso voiced concerns over the weaker yen, saying the speed of the currency’s recent decline against the dollar was “too fast.”
Japan’s Prime Minister Shinzo Abe dissolved parliament on Friday, clearing the way for elections to be held on December 15 to seek a fresh mandate for his economic policies, which call for a weaker yen.
EUR/USD was up 0.15% to 1.2408, off the almost two year trough of 1.2363 struck overnight.
The single currency found support after a report showed that Germany’s Ifo business climate index rose to 104.7, up from 103.2 in October. Economists had forecast a decline to 103.0.
The data eased concerns over the outlook for growth in the euro zone’s largest economy.
Euro zone bond yields fell to record lows on Monday amid expectations that the European Central Bank is moving closer to embarking on quantitative easing measures to spur inflation.
The yield on Spanish 10-year bonds dropped below 2% for the first time, falling to 1.97%, while the yield on Irish 10-year bonds fell to 1.48% from 1.49% late Friday.
ECB President Mario Draghi warned Friday that inflation expectations were declining to levels that were very low and said it is ready to expand its stimulus program to boost inflation as quickly as possible.
Elsewhere, GBP/USD was hovering close to 14-month lows at 1.5668, while USD/CHF slid 0.11% to 0.9688.
The Australian and New Zealand dollars were lower, with AUD/USD down 0.36% to 0.8640 and NZD/USD easing 0.11% to 0.7872.
The commodity exposed dollars were boosted on Friday after China’s central bank unexpectedly cut interest rates for the first time in more than two years in response to signs of a slowdown in the world’s second-largest economy.
USD/CAD was little changed at 1.1240, holding above Friday’s three week lows of 1.1189.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was steady near more than four year highs at 88.31.