Investing.com - The dollar moved higher against the yen on Monday as Friday’s upbeat U.S. economic reports continued to bolster market sentiment, dampening demand for the traditional safe haven yen.
USD/JPY was up 0.37% to 107.27 from 106.87 late Friday.
Data on Friday showed that U.S. consumer sentiment rose to the highest level since July 2007 this month and another report showed that housing starts rose more than expected in September.
The data reinforced expectations that the Federal Reserve will raise interest rates in the second half of 2015 and calmed investor jitters at the end of a volatile week of trading.
The dollar fell to a five week trough against the yen mid-week and weakened against the other major currencies amid fears that slower global growth would act as a drag on the U.S. economy.
Demand for the yen was also hit by speculation that Japan’s pension fund is growing closer to increasing its holdings of stocks and overseas assets, which would drive up demand for foreign currencies.
The Nikkei newspaper said Monday that the $1.2 trillion Government Pension Investment Fund will raise its target for foreign bonds and shares to around 30% from 23%.
The euro was almost unchanged against the dollar, with EUR/USD at 1.2754, off the three-week highs of 1.2876 hit last Wednesday. The single currency was higher against the yen, with EUR/JPY advancing 0.26% to 136.74.
The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, edged up 0.07% to 85.37, holding above last week’s three week lows of 84.53.