By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia, remaining near a five-year high to the yen as investors digested the hawkish tone in the .

By 11:05 ET (04:04 GMT), the that monitors the greenback and a basket other currencies had risen 0.01% to 96.118

This pair fell 0.20% to 115.87

Both the pair fell 0.45% to 0.7187, and both were down 0.38% at 0.6766.

The pair was up 0.29% to 6.3738, with  released earlier in the day showing that the was 53.1 in December.

This pair dropped 0.14% from 1.3535 to 1.3535.

Since Wednesday when the dollar rallied to Tuesday’s high at 116.355 on Tuesday, it was virtually unchanged against the Japanese yen.

According to the Fed’s minutes released Wednesday from the December meeting, the Fed stated that the U.S. labor markets are “very tight”, which could allow for faster interest rate rises in order to lower high inflation. Futures on the federal funds rate were quick to price in a roughly 80% chance of a quarter-percentage-point Fed hike by the March 2022 meeting.

U.S. Treasury yields on five year terms, which are sensitive to expectations regarding interest rates, reached a two-year record.

Investors also digested Tuesday’s , which was a much higher-than-expected 807,000 in December. Due Friday is the U.S. employment report.

Analysts at TD Securities wrote that the USD must remain resilient, despite rising odds of a rate increase in March 2022 and QT threat this year.

The USD/JPY should be supported in time. However, we believe that a Fed with a high degree of hawkishness could result in some discomfort for risk-market investors.

Despite the hawkish stance taken by the Fed in recent months, the dollar’s gains have languished since it hit a 16-month high of 96.938 in late November 2021.

RBC strategist George Davis stated that “trend and momentum continue to favor dollar” and pointed out the euro, pound and Australian dollars in his report. At $1.1310, the euro was traded.