The dollar traded near a five-year high against the yen on Thursday, a day after the Federal Reserve surprised some investors by announcing its long-awaited first cut in its bond-buying program.
The dollar had rallied broadly on Wednesday after the Fed said it would reduce its monthly asset purchases by $10 billion, bringing them down to $75 billion. A reduction in Fed stimulus will help lift U.S. bond yields and buoy the currency.
The dollar jumped to a five-year high against the yen of 104.36 yen, according to Reuters data, before retreating to 104.15, down 0.1 percent on the day.
The dollar slipped against the yen after data showed the number of Americans filing new claims for unemployment benefits rose last week to the highest in nearly nine months, casting a shadow on the labor market.
The euro hit its lowest in almost two weeks at $1.3648 and last traded at $1.3669, down 0.1 percent.
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