LONDON, June 13: The dollar hit its highest level against the yen for four and a half years on Wednesday amid growing speculation that US interest rates would push higher, dealers said.In late European trading, the dollar hit 122.38 yen -- the highest point since December 2002.

The euro fell as low as $1.3264, a level last seen in late March, before pulling back up to $1.3297 in late trades.

Behind the dollar’s spike against the yen was volatility on Tuesday on the US bond market, where the yield on 10-year bonds surged to a five-year high of 5.32 per cent.

That surpassed the US Federal Reserve’s short-term Fed funds interest rate, which has been at 5.25 percent for a year.

The yield on 10-year bonds retreated to 5.23pc on Wednesday, however.

On the London Bullion Market, the price of gold edged up to $647.65 per ounce, from $647.25 late on Tuesday.—AFP