TOKYO , Dec. 26 -- ( Kyodo ) _ The U.S. dollar climbed to the upper 104 yen range in Thursday trading in Tokyo , briefly hitting a new five-year high, as traders moved to a "risk-on" mode. At 5 p.m. , the dollar fetched 104.76-78 yen compared with 104.40-42 yen in Tokyo at 5 p.m. Wednesday . It moved between 104.39 yen and 104.85 yen during the day, changing hands most frequently at 104.70 yen . The euro was quoted at $1.3685-3689 and 143.38-42 yen against $1.3674-3677 and 142.77-81 yen in Tokyo late Wednesday afternoon. The dollar and euro both leapt against the yen to highs last seen in October 2008 , gaining most ground in early morning trades. Optimism about the U.S. economy continued to underpin the dollar, with market participants reacting to the U.S. Federal Reserve's decision last week to start tapering its monetary stimulus. The euro was also bought on increases in euro bond yields. Japanese importers squaring their books ahead of the year-end came as an additional boost for the dollar, said Yuzo Sakai , manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow . A damper on risk appetite had been lifted in the Japanese stock market at the end of Wednesday's trading, as the deadline passed for the last trades to qualify for special tax breaks on equity investment. The dollar and euro halted their rise against the yen before noon as traders locked in gains, but traders "naturally took a breath after such a rapid climb," Sakai said. The New York market, which was closed Wednesday for Christmas Day , will open on Thursday, but many European markets will remain closed for Boxing Day . "There's almost nothing left this year to dent the dollar's rise, and an upbeat mood in New York on Thursday led by an ever-higher Dow could push the U.S. currency above 105 yen as the market opens," said a senior dealer at a major Japanese bank. Prime Minister Shinzo Abe's visit to the war-linked Yasukuni Shrine on Thursday had little effect on the currency market so far, but market participants are keeping their eyes on reactions from Japan's major partners. "If serious condemnation of Abe rears its head, particularly in the United States , the Nikkei stock index could dip and this would affect the dollar-yen pair," the dealer said.
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