Investing.com - The dollar rose to a fresh six year high against the yen on Thursday after the Federal Reserve offered fresh guidance on its plans to raise interest rates, underlining concerns over the diverging policy stance between it and Japan’s central bank.
USD/JPY hit highs of 108.86, the strongest level since September 2008 and was last up 0.31% to 108.68.
The Fed statement reiterated that it expects rates to remain on hold for a "considerable time", after its bond purchasing program ends, but it also outlined in more detail how it will start to raise short term interest rates when the time comes.
The Fed cut its monthly asset purchase program by another $10 billion, keeping the program on track to finish next month.
Speaking at the bank’s post-policy meeting press conference Chair Janet Yellen stressed that the timing of any change in interest rates is dependent on the strength of the economic recovery.
The yen remained under heavy selling pressure after data on Thursday showed that exports fell in August and another report showed that business confidence deteriorated this month.
The weak data added to concerns over the outlook for the faltering economy and fuelled expectations for additional easing measures from the Bank of Japan in the coming months.
EUR/USD was up 0.14% to 1.2877 after falling to fresh 14-month lows of 1.2833 overnight.
The euro has remained locked in a tight range against the dollar since the European Central Bank unexpectedly cut rates to record lows across the euro zone earlier this month and announced additional measures in a bid to shore up inflation.
Elsewhere, the euro rose to three month highs against the weaker yen, with EUR/JPY rising 0.43% to 139.92.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 84.74, not far from session highs of 84.90, the highest level since July 2010.