The dollar rose against most major currencies on Wednesday, hitting an eight-year peak against the yen on expectations the Federal Reserve would raise interest rates later this year due to signs the U.S. economy is recovering from an anemic first quarter.
The euro recovered from a one-month low versus the greenback following reports of progress between Greece and creditors toward a deal that would unlock cash for the debt-laden nation to avert default.
The dollar's gains were also fed by automatic sell orders for the yen which had traded in a relatively tight range versus the greenback, traders said.
"We broke out of a technical pattern because of the general dollar strength," Marc Chandler, chief global currency strategist at Brown Brothers Harriman & Co. in New York, said of the Japanese currency.
Japanese Economics Minister Akira Amari said earlier Wednesday while recent movements reflected the dollar's gain rather than the yen's fall, excessive currency moves were undesirable, echoing earlier signals from the finance ministry and Bank of Japan.