By Shinichi Saoshiro
TOKYO (Reuters) - The dollar hit a six-week high against the safe-haven yen on Thursday as investor risk appetite remained strong, boosting equities and pushing U.S. debt yields higher to favor the greenback.
The euro sagged ahead of the European Central Bank's policy meeting later in the session. While the ECB is seen standing pat on policy, the market expects the central bank to hint at future monetary policy easing, forecast to come as early as September.
The dollar was up 0.3 percent at 107.210 yen after touching 107.460, its highest since June 7. The U.S. currency topped 106.875, a high marked late in June before the Brexit referendum result was known.
The euro stood little changed at $1.1018 after shedding 0.5 percent overnight, when it stooped to a near one-month low of $1.0980.
"The dollar continues to benefit from the strength in U.S. equities, which have gone a head above their global peers and are attracting money thanks to high dividends, with strong earnings also helping. This has resulted in 'risk on', sustaining the dollar's rise against the yen," said Junichi Ishikawa, forex analyst at IG Securities in Tokyo.
The S&P 500 (SPX) and the Dow (DJI) set fresh records on Wednesday, with the latter rising for the ninth straight session, as Microsoft's strong results boosted the indexes. (N)
"The dollar could suffer a sudden fall, with the Dow possibly falling any time now following days of successive record highs," Ishikawa said.
The dollar index (DXY) hovered near 97.323, its highest level since March 10 marked overnight.
Sterling extended gains after getting a boost on Wednesday from a Bank of England survey that showed no clear evidence of a slowing of economic activity after last month's Brexit vote.
The pound was up 0.2 percent at $1.3240 . It was still down about 0.6 percent on the month, having tumbled to a 31-year low of $1.2798 on July 6.
The Australian dollar touched a two-week low of $0.7452 , giving ground to a broadly stronger greenback.
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