Dollar hits fresh high against yen

The dollar hit a fresh high against the yen Thursday as investors sold the low-yielding Japanese currency for better returns off the greenback.

The yen fell to 123.75 before recovering to 123.67, remaining above its December 2002 high of 123.13 yen against the dollar.

The yen has come under new pressure after Bank of Japan Governor Toshihiko Fukui indicated that interest rates, currently at 0.25 percent, are not likely to rise at next month's meeting of the central bank.

Higher interest rates, a weapon against inflation, can strengthen a currency by making investments denominated in it more attractive.

The 13-nation euro fell to $1.3387 in late New York trading from $1.3418 late Wednesday. The British pound dipped to $1.9922 from $1.9947.

Also Thursday, encouraging U.S. economic data offset an unexpected rise in jobless claims to further boost the dollar.

The Philadelphia Federal Reserve reported that regional manufacturing grew in June at the strongest rate since April 2005. The bank's index of regional manufacturing activity jumped to 18 from 4.2 in May.

The Conference Board's May index of leading economic indicators predicted the U.S. economy will expand modestly in the coming months, and economists said jobs should continue to be plentiful, despite an unexpected surge in jobless claims last week.

The dollar held onto gains made off Wednesday's soaring bond yields, which traded more narrowly Thursday. The yield on the benchmark 10-year Treasury rose to 5.17 percent from 5.15 late Wednesday.

The rising yields have fueled concerns about a U.S. interest-rate hike since passing 5 percent last week for the first time since last summer.

Economists still predict that the Federal Reserve will leave rates unchanged when it meets next week.

In other trading, the dollar bought 1.0759 Canadian dollars, up from 1.0662, and 1.2418 Swiss francs, rising from 1.2367.