Dollar makes gains on back of stocks optimism
The dollar rose against the yen on Wednesday as the markets gained renewed confidence in American stock futures.
Choppy trading saw the yen fall from a session high of 114.82 to 115.31 against the greenback as carry trading got underway in earnest.
However, the dollar's fortunes may change in the next few days as analysts expect pessimistic reports from the US labour market.
The Labour Department is to reveal how many new jobs were created in August and the last three months have seen numbers fall.
"The dollar will weaken due to a slowdown in the US,'' currency analyst Yuji Kameoka, told Bloomberg.
"A housing slump and credit-market losses will slow the economy, forcing the Fed to cut rates at least twice this year,'' he added.
The euro may also be heading for turbulent times as tumultuous credit markets might prevent the European Central Bank from raising interest rates when it meets today.