Investing.com - The U.S. dollar was higher against the yen on Friday, as expectations for a U.S. rate hike this year continued to support the greenback and investors eyed the release of U.S. manufacturing activity data later in the day.
USD/JPY hit 120.58 during European afternoon trade, the pair's highest since December 30; the pair subsequently consolidated at 120.55, gaining 0.66%.
The pair was likely to find support at 119.22, the low of December 31 and resistance at 121.86, the high of December 8 and a seven-year high.
The dollar remained broadly supported as a recent string of upbeat U.S. data sparked optimism over the strength of the country's economic recovery and added to expectations for the Federal Reserve to soon raise interest rates.
Meanwhile, investors continued to focus on developments in Greece, where parliament was formally dissolved on Wednesday after Prime Minister Antonis Samaras failed earlier in the week to persuade lawmakers to back his candidate for head of state, casting the country's international bailout into doubt.
Parliamentary elections were set for January 25, almost 18 months before the current coalition's term was due to end.
The yen was also lower against the euro, with EUR/JPY edging up 0.19% to 145.25.
In the euro zone, research group Markit said the bloc's manufacturing purchasing managers' index fell to 50.6 in December from 50.8 in November. Analysts had expected the index to remain unchanged this month.
Germany's manufacturing PMI remained unchanged at 51.2 this month, in line with expectations, while France's manufacturing PMI hit 47.5 in December, down from 47.9 the previous month and confounding expectations for an unchanged reading.
Also Friday, European Central Bank President Mario Draghi said the risk of deflation in the euro zone cannot be excluded, signaling the possibility of large-scale quantitative easing measures.
Later in the day, the Institute for Supply Management was also to publish data on U.S. manufacturing activity.