Investing.com – The dollar rose against the yen on Thursday, moving back towards seven year highs reached earlier in the week as continued speculation over snap elections in Japan continued to weigh on the yen.
USD/JPY was up 0.22% to 115.78, holding just below Tuesday’s high of 116.09, the most since October 2007.
The yen has come under renewed selling pressure this week amid speculation that Prime Minister Shinzo Abe could call a snap election in December.
Speculation that the prime minister could postpone a proposed sales tax increase, scheduled for October 2015 also weighed.
A win for Abe would indicate continued support for his for his economic and fiscal policies, which call for a weaker yen.
Demand for the dollar continued to be underpinned by the diverging monetary policy outlook between the Federal Reserve and its major peers.
Investors were looking ahead to U.S. data on initial jobless claims later in the day and Friday’s retail sales report for further indications on the strength of the recovery.
The euro edged higher against the dollar, with EUR/USD easing up 0.14% to 1.2455, remaining supported above last week’s 26-month lows of 1.2356.
In the euro zone, data on Thursday showed that Germany’s consumer price index fell 0.3% from a month earlier in October. The annual rate of inflation was steady at 0.8%.
The soft data added to concerns over the outlook for the region’s largest economy ahead of Friday’s reports on third quarter growth.
Elsewhere, the euro was higher against the softer yen, with EUR/JPY advancing 0.41% to 144.23.