USD reached its highest level against the YEN in 12 years

The US dollar makes rally against the yen, after earlier today reached its highest level since December 2002. The main reason that analysts point for  the sharp rise is related to the expectations that Fed will raise interest rates later this year.

The bets that the US Federal Reserve will raise interest rates soon are again at the center of investors' attention. Signs of improvement in the economic performance of the US economy are the foundation of renewed speculation that the central bank will start to increase interest rates.

The sharp appreciation of the dollar against the yen is coming against the backdrop of the significant difference in the policies of central banks in the US and Japan. While the Fed is close to rising interest rates, the Japanese bank continues with the aggressive program of quantitative easing, without a clear plan when pouring money into the economy will stop.

Frustrating economic news in the first quarter shaken investors and they pulled back their bets for appreciation of the dollar against the yen, but in recent days the couple renewed unidirectional movement.

The market participants commented that they expect verbal intervention from the authorities in Tokyo to stabilize the yen. Forex strategist Nomura Securities Yunsuke Ikeda commented that the pair USD / JPY could reach 125 soon, but his expectations are that hedge funds will conclude their profits before the next report on changes in non-agricultural employment in the United States, which will be carried next Friday.