Investing.com - The dollar rose to fresh four-month highs against the yen on Tuesday as investors’ awaited comments from Federal Reserve Chair Janet Yellen, while sterling turned lower after a speech by Bank of England Deputy Governor Ben Broadbent.
USD/JPY was up 0.32% at 114.39 by 10.44 AM ET, the strongest level since March 15.
Investors were looking ahead to comments from Yellen, who was due to make semi-annual testimony on monetary policy before the U.S. Congress on Wednesday and Thursday for fresh cues on the future path of interest rates.
Markets were waiting to see if Yellen would indicate whether the Fed is on track to make a third rate hike this year.
The Fed hiked rates at its June meeting and stuck to its forecast for one more hike this year and Friday’s stronger-than-expected U.S. jobs report eased recent concerns over whether officials would be able to stick to their planned tightening path.
The yen remained on the defensive after Bank of Japan Governor Haruhiko Kuroda in a speech on Monday reiterated that the bank is resolved to keep its stimulus program in place until inflation is in line with its 2% target.
The remarks underlined the divergent monetary policy outlook between the BoJ and its peers in the U.S. and Europe.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 95.84.
The dollar was a touch lower against the euro, with EUR/USD rising 0.13% to 1.1414.
The euro hit fresh 17-month highs against the yen, with EUR/JPY rising 0.46% to 130.60.
Meanwhile, sterling was lower after Broadbent in a speech warned that Britain will suffer if its existing trade links with the European Union are weakened by Brexit.
Some investors had expected Broadbent to give an indication of his position on whether interest rates should rise, but his speech did not discuss monetary policy at all.
Elsewhere, the New Zealand dollar remained sharply lower, with NZD/USD down 0.96% to 0.7205 following reports that a large earthquake had struck off the country’s south island, although there were no reports of damage.