Investing.com - The dollar moved higher against the yen on Wednesday as the prospect of more economic stimulus by China bolstered risk appetite and dampened demand for the safe haven yen.
USD/JPY rose 0.74% to 120.70, off overnight lows of 119.8.
Japan’s Nikkei posted the largest one day percentage gain in seven years on Wednesday after China’s finance ministry said late Tuesday that it would implement fresh measures to stimulate economic growth.
Chinese equeties rallied as the announcement alleviated concerns over slowing growth, driving broader gains in regional equity markets and in commodity markets.
The dollar was also higher against the euro, with EUR/USD dipping 0.17% to 1.1182.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.25% to 96.08.
The commodity linked currencies were also higher, with AUD/USD rising to one-week highs of 0.7070 and NZD/USD rising 0.31% to 0.6362.
The kiwi’s gains were held in check ahead of Thursday’s monetary policy meeting by the Reserve Bank of New Zealand. The bank was widely expected to cut rates to 2.75%.
The Canadian dollar was little changed at 1.3214 as investors looked ahead to the Bank of Canada’s monetary policy statement later in the day. The bank was expected to keep rates on hold after cutting rates twice earlier this year.