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Tokyo - The dollar crept towards ¥120 and a new seven-year high on Wednesday as a batch of encouraging US data showed further improvement in the world's largest economy.
In early Tokyo trading, the dollar rose as high as ¥119.43, before settling to ¥119.20 in afternoon trade - that compares with ¥119.22 in New York on Tuesday afternoon. The US unit last broke the ¥120 level in July 2007.
The yen has been under pressure after Moody's on Monday lowered its credit rating on Japan's sovereign debt and later its outlook on five of the country's commercial banks.
"It wouldn't be a surprise" if the pair tests the 120 mark later this week, said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow.
"Investors may lack a sense of accomplishment until the pair hits 120," he told Dow Jones Newswires.
In other trading, the euro inched up to $1.2383 from $1.2381 in New York while sagging to ¥147.55 from ¥147.62.
On Tuesday, the US Commerce Department said construction spending rose 1.1% in September, almost twice as much as expected, while industry specialist AutoData said the car industry saw a healthy 4.6% increase in sales last month.
US online sales also rose 16% year on year on Monday, according to the Adobe 2014 Digital Index.
The estimate for Cyber Monday, often seen as the annual high point for online retail, helped offset disappointing data on the "Black Friday" kickoff to the holiday shopping season.
Traders were also focused on Thursday's European Central Bank (ECB) meeting after officials dampened speculation of fresh measures to counter the threat of deflation in the eurozone.
"The euro has been stable of late, mainly on the back of falling expectations of the ECB considering a more aggressive monetary policy stance as soon as this week," Credit Agricole said.
The greenback was mixed against other Asia-Pacific currencies.
The Australian dollar fell to 84.12 US cents from 85.04c on Tuesday after data showed Australia's economy slowed more than expected in the third quarter.
The US dollar also rose to 32.90 Thai baht from 32.80 baht, to Sg$1.3103 from Sg$1.3051, to Tw$31.11 from Tw$31.03, to 1 112.40 South Korean won from 1 105.30 won, and to 12 283.00 Indonesian rupiah from 12 273.80 rupiah.
The dollar slipped to 61.92 Indian rupees from 61.97 rupees while fetching 44.74 Philippine pesos against 44.75 pesos
The Chinese yuan rose to ¥19.37 from ¥19.26.
