Investing.com - The dollar pared gains against the yen on Thursday, easing back from six year peaks after data showed an unexpected increase in the number of Americans filing new claims for unemployment benefits last week.
USD/JPY was last up 0.07% to 106.92, off the highs of 107.14 struck earlier in the day, the most since September 2008.
The pair was likely to find support at 106.63, the session low and resistance at around the 108.00 level.
The Labor Department reported that initial claims for state unemployment benefits rose by 11,000 to a seasonally adjusted 315,000 for the week ended September 6, the highest level since late June, from the previous week’s revised total of 304,000.
Analysts had expected jobless claims to fall by 4,000 to 300,000.
Expectations that the Federal Reserve is growing closer to raising interest rates continued to boost the dollar against the yen, as the Bank of Japan looks likely to stick to a looser monetary policy stance.
A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.
The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
The dollar rose to six year peaks against the yen earlier Thursday after BoJ Governor Haruhiko Kuroda said the bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.
Earlier this week official data showed that Japan’s second quarter economic contraction was larger than initially estimated, and another report showed that the country’s current account surplus fell short of expectations in July.
The lackluster data indicated the economy is struggling to gain momentum and fuelled expectations for more stimulus from the Japanese central bank.
The euro was at two month highs against the softer yen, with EUR/JPY adding 0.25% to trade at 138.37.
Elsewhere, EUR/USD was last up 0.13% to 1.2933, holding above Tuesday’s 14-month lows of 1.2858.
The single currency has remained under pressure since the European Central Bank unexpectedly cut rates to record lows on September 4 and unveiled new easing measures in a bid to shore up inflation in the euro area.