Japan's currency has climbed amid speculation that the country's bank is set to raise interest rates.

The yen rose to 117.71 per dollar in London early this morning, increasing to 159.70 per euro, while the British pound fell to $1.9994.

Japan's yen is thought to have been affected by slumping Asian socks, Bloomberg reports, while the Bank of Japan is weighing up potential interest rate changes after consumer spending fell for the first time in ten months in February.

Takashi Miyachi, a senior currency dealer in Tokyo at Mizuho Corporate Bank, told the news source: "There have been some rumours since yesterday the BOJ will raise rates even in May, especially among foreigners. Groundless or not, this is supporting the yen."

Meanwhile in the UK, the sterling rose to the $2 mark yesterday, prompting comment from experts.

Barry Naisbitt, chief economist at financial services provider Abbey, said that the pound's appreciation should be good news for anyone planning holidays in the US, as well as helping to keep prices of imported goods down.

He predicted that a situation in which the UK's interest rates are higher than those in the US could bolster pressures to help the sterling maintain its highest level in over ten years.