Dollar hits fresh eight-year high on yen

The dollar powered to a fresh eight-year high against the yen on Tuesday, while the euro was weighed by growing concerns about Greece's bailout talks as a repayment deadline looms.

In Tokyo afternoon trade, the greenback rose to 122.53 yen, levels last seen in mid-2007, and up from 121.66 yen on Monday.

The dollar has been underpinned by expectations the Federal Reserve will raise interest rates in the coming months -- a view supported by comments from its chief Janet Yellen who said Friday she expects a hike "at some point this year".

"The central scenario still points to a September lift-off," said Cameron Bagrie, chief economist at ANZ Bank New Zealand.

Traders are awaiting the release of key US data this week including revised economic growth for the first quarter and durable goods orders.

The euro weakened to $1.0907 from $1.0980 and to 133.52 yen from 133.60 yen on Monday.

Many markets around Europe and in New York were closed Monday for public holidays.

Investors are watching closely for any new developments in talks between Greece and its international creditors over unlocking bailout funds, with no deal in sight and 300 million euros of payments due next week.

The discussions with the European Union, European Central Bank and the International Monetary Fund are aimed at releasing the final tranche of its 240-billion-euro bailout.

But Athens is resisting austerity and reform demands to free up the money and thus avoid possible default that could drive the country out of the eurozone.

"Greece is edging closer to a deal, however, the detail, size and scope of that deal is being blurred by the hour," Evan Lucas, market strategist in Melbourne at IG Ltd., said in a client note.

The dollar was mostly stronger against other Asia-Pacific currencies.

It rose to Tw$30.54 from Tw$30.49 on Monday, to 63.74 Indian rupees from 63.66 rupees, to Sg$1.3457 from Sg$1.3408, and to 33.63 Thai baht from 33.51 baht.

The US unit also strengthened to 13,190.00 Indonesian rupiah from 13,157.80 rupiah, and to 44.66 Philippine pesos from 44.59 pesos, while it weakened to 1,098.11 South Korean won from 1,099.95 won.

The Australian dollar inched up to 78.25 US cents from 78.22 cents while the Chinese yuan bought 19.64 yen against 19.62 yen.

-- Bloomberg News contributed to this story --