The dollar jumped against the Japanese yen on Tuesday as investors pared back expectations of further monetary easing by the Federal Reserve following stronger-than-expected US retail sales data. The euro rallied against the yen as well, but fell against the greenback as better-than-expected German and French economic output data was tempered by concerns about a slowdown in the broader euro zone region.
The dollar hit a global session high of 78.93 yen, its highest since July 18. It last traded at 78.84, up 0.7 percent on the day, according to Reuters data. The euro last traded at 97.14 yen, up 0.6 percent on the day. In the options market, the bias for dollar puts has improved, with three-month dollar/yen risk reversals trading at 0.10 percent on Tuesday, down from 0.18 percent the previous day, 0.20 percent a week earlier and 0.35 percent at the start of July. The euro last traded at $1.2324, down 0.1 percent, above an earlier low of $1.2315 and below a high of $1.2385, according to Reuters data.