TOKYO- The dollar edged up in Asia on Thursday, adding to gains seen in New York after Federal Reserve chief Janet Yellen hinted that interest rates could rise early next year, earlier than expected.
The greenback fetched 102.40 yen in Tokyo midday trade, slightly up from 102.32 yen late in New York and much stronger than the 101.51 yen in Tokyo earlier Wednesday.
The euro bought $1.3826 and 141.64 yen, mixed from $1.3827 and 141.53 yen in US trade.
he Fed said Wednesday it would shave another $10 billion off its bond-buying stimulus — to $55 billion a month — saying the economy was picking up and a recent spate of soft data was caused by severe winter weather.
But while the move was expected, Yellen surprised markets at a news conference that the time frame for a rate hike could be “on the order of around six months” after the stimulus ends.
With the present rate of reduction likely to see asset purchases tapered off by the end of this year, that means rates could go up in the first half of 2015. Some analysts have previous forecast a rise taking place at the back end of next year.
“Yellen can be seen as not being so dovish as expected,” said Hiromishi Shirakawa, research analyst at Credit Suisse.
“We should pay attention to the possibility that the era of a firm dollar and weak stocks will start,” he said in a note.
While higher interest rates would tend to draw investors seeking higher returns to the dollar, they also tend to dampen stock market activity.
The Dow Jones Industrial Average fell 0.70 percent on Wednesday, while the Nikkei was down 0.52 percent by the break Thursday.