The dollar was set for a 0.9% weekly gain, its largest since September, as rising U.S. yields and bets on a larger Federal Reserve rate hike supported the currency. The yen hovered near 160 per dollar, prompting Japan to warn it would respond to currency volatility.
The dollar held near a 19-month high on Friday and was on track for its strongest weekly rise in two months. Two-year Treasury yields had risen about 34 basis points this week to around 4.86%, while traders priced in a roughly 12% chance of a 50-basis-point Fed rate increase next month, up from zero last week.
The yen was steady at 159.99 per dollar, near its weakest level since early September, and had fallen about 1% this week. Finance Minister Satsuki Katayama said Japan would respond appropriately to currency volatility. Japan spent 15.4 trillion yen, or $96.5 billion, to bolster the currency after it fell to 163.99 per dollar in late July.
The euro was unchanged at $1.1053 and down 0.8% for the week. The Australian dollar had fallen about 3.4% this month to $0.6789, making it the worst-performing G10 currency against the dollar. Bitcoin was down 3% at $69,361, while ether fell 2.7% to $1,962.02.
