Dollar hits 4-year high against yen

The dollar rose to a four-year high against the yen today in the wake of a slight increase in year-on-year US core producer prices in May.

In the past six weeks, the benchmark 10-year US Treasury note yield has risen nearly 60 basis points as dealers priced out any chance of a Federal Reserve interest rate cut, helping the dollar rally from record lows against the euro hit in late April.

Market participants have begun to consider the possibility of an interest rate rise this year to contain inflation, which is why the small rise in the core producer price index to 1.6 per cent from 1.5 per cent on a year-over-year basis was scrutinised.

Core prices exclude food and energy costs.

The euro was slightly down against the dollar at $1.3295.