TOKYO: The dollar extended its gains on Wednesday after getting a boost from strong housing data and expectations for more European central bank stimulus.
The greenback fetched 121.02 yen -- around a two-month high -- against 120.68 yen in New York and 119.94 yen in Tokyo earlier Tuesday.
The euro weakened to $1.1073 from $1.1149, and to 134.08 yen from 134.54 yen.
Traders moved into the greenback in New York trade after figures that showed US new home construction hit its strongest pace in more than seven years in April renewed talk of an interest rate.
The euro retreated after a European Central Bank official said it would increase its asset purchases in May and June to offset an expected financial market slowdown in the following months.
"The dollar is being bought on the relatively strong housing data and bond-market friendly comments from ECB officials," said Yujiro Goto, a Nomura currency strategist.
"Since the Federal Reserve is data-dependent, seeing more good economic reports is overwhelmingly important," he told Bloomberg News.
Investors will late Wednesday pore over the minutes of the Fed's April 28-29 policy meeting to look for clues about when it might lift interest rates, which have been pegged at record lows since 2008.
Currency markets were little affected by data showing Japan's economy expanded by a better-than-expected 0.6 percent in the first quarter. Markets had been expecting a 0.4 percent rise.
The dollar was mostly higher against other Asia-Pacific currencies.
It strengthened to 44.59 Philippine pesos from 44.49 pesos on Tuesday, to Tw$30.50 from Tw$30.44, and to 1,094.94 South Korean won from 1,090.58 won.
The greenback also climbed to 63.72 Indian rupees from 63.68 rupees, to Sg$1.3361 from Sg$1.3277, and to 33.59 Thai baht from 33.37 baht, while its softened to 13,166.00 Indonesian rupiah from 13,169.90 rupiah.
The Australian dollar slipped to 79.26 US cents from 79.94 cents while the Chinese yuan rose to 19.49 yen from 19.33 yen.
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