Investing.com - The dollar firmed against the yen on Thursday after upbeat U.S. growth data coupled with a Federal Reserve decision to close its bond-buying program sparked fresh expectations that rate hikes are not far on the horizon.
In U.S. trading, USD/JPY was up 0.07% at 108.98, up from a session low of 108.75 and off a high of 109.36.
The pair was expected to test support at 107.58, the low from Oct. 27, and resistance at 109.87, the high from Oct. 6.
The Commerce Department reported earlier that the U.S. gross domestic product grew at an annual rate of 3.5% in the three months to September, beating forecast for 3% growth, which fueled demand for the greenback on expectations that the Federal Reserve will hike interest rates in 2015.
On Wednesday, the Federal Reserve said it was ending its monthly bond-buying program due to improvements taking place in the labor market.
Still, the dollar didn't shoot up on Thursday, as the GDP report revealed that consumer spending slowed to 1.8% from 2.5% in the second quarter, and fixed investment spending also declined from the previous quarter, pointing to slackening domestic demand.
Elsewhere, the Labor Department reported earlier that the number of individuals filing new claims for jobless benefits rose by 3,000 to 287,000, confounding market forecasts for a decline to 283,000.
Separately, the yen was up against the euro and down against the pound, with EUR/JPY down 0.08% at 137.46, and GBP/JPY trading up 0.09% at 174.50.
On Friday, Japan is to release reports on household spending and the consumer price index. Meanwhile, the Bank of Japan is to announce its monetary policy decision and publish its rate statement. The bank is also to hold a post-policy meeting press conference.
The U.S. is to round up the week with data on personal income and expenditure as well as revised data on consumer sentiment and a report on business activity in the Chicago region.