Dollar hits highest level since mid-October

The dollar rose to its highest level in more than eight months against the yen on Wednesday, keeping its edge ahead of a Federal Reserve meeting that is seen widening the U.S currency's interest rate advantage over its rivals.
With the market already pricing in a US rate increase, attention has turned to any hints concerning future rises in the post-meeting statement, although some dealers said the central bank was unlikely to alter its position to keep raising rates at a measured pace.
"I don't think they are going to add anything special to their comments," said the chief trader at a European brokerage.
"They are still going to keep raising at a measured pace until rates hit 4 percent. That's the market's consensus."
The Fed is expected to boost rates by a quarter percentage point to 3.25 percent on Thursday at the end of its two-day meeting, bolstering the yield appeal of the dollar against the euro and the yen.
The key rate in the euro zone has stayed at 2 percent for over two years, while it has held at almost zero percent in Japan for more than four years.
With the rate increase factored into the market, some analysts argued that barring a big surprise, the meeting would have minimal impact on the currency market. "So long as the FOMC doesn't decide not to raise rates at all, or raises by 50 basis points, and so long as it doesn't make any major changes to its rhetoric, it should be a non-event," said Toru Umemoto, chief forex strategist at Barclays Capital.
The dollar was fetching around 110.02 yen in late Tokyo trading after rising to 110.17 yen, its highest level since mid-October, according to electronic trading platform EBS.
The euro was slightly higher at $1.2064 versus $1.2053 in late US trade on Tuesday, when it fell nearly 1 percent.
Against the Japanese currency, the euro bought 132.71 yen versus 132.63 in late US trade.
Some analysts said Japanese May industrial production figures suggesting that the country's hi-tech sector was taking longer to adjust to slowing demand was also taking its toll on the yen.
While traders showed limited initial reaction to an expected 2.3 percent fall in overall output in May, some in the market said other surprisingly weak components of the series showed that Japan's economy is struggling to get back on its recovery path.
"Shipments fell and there was a jump in stockpiles of electronic devices, which shows that IT sector adjustments could be delayed," he said, adding that this was hindering growth.
At the same time, some analysts said the dollar's rise against the yen was stemmed by concerns about the Bank of Japan's quarterly tankan poll of business sentiment due on Friday.