USD/JPY Eases Below 124

The dollar climbed to a 12-1/2-year high against the yen on Thursday before pulling back as investors bet that U.S. interest rates will rise later this year while Japan’s monetary policy remains ultra-loose.

The latest data on U.S. jobless claims and pending home sales supported expectations that the Federal Reserve is moving toward raising rates by year-end, analysts said.

“The tone in U.S. economic numbers is improving. This reminds investors U.S. rates are moving up later this year and has revived the dollar’s appeal since last week,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.