Dollar up in Asia

TOKYO, Sept 18 (AFP): The dollar rose against most currencies in Asia Thursday after the US Federal Reserve hinted interest rates could rise more than initially thought next year, while the pound dipped as Scotland goes to the polls in its independence referendum.

In Tokyo afternoon trade, the dollar hit a fresh six-year high of 108.72 yen, compared with 108.29 yen in New York Wednesday. The euro slipped to $1.2860 from $1.2865, while it climbed to 139.85 yen from 139.32 yen.

Investors also shifted into the greenback from a basket of Asia-Pacific currencies including the South Korean won, Singapore dollar and Indonesian rupiah on hopes for higher returns in the United States.

After a closely watched meeting, the US central bank said Wednesday it would stick to its policy on interest rates, keeping them at a record low of 0-0.25 per cent despite growing calls for a rise as the world's number one economy strengthens.

Markets had been on the watch for a change in the central bank's language, which could have signalled a rate hike before the mid-2015 timeline currently in place.

Bank chief Janet Yellen continued with her line that there remains too much slack in the jobs market even as the US unemployment rate has fallen to 6.1 per cent.

However, the Fed did suggest that when rates eventually increase, they could end next year higher than initially estimated.

More Fed policymakers than ever agree that a rate increase will happen next year. Their median forecast for the fed funds at the end of the year was 1.375 per cent, 0.25 percentage point more than the June median.

Markets are also keeping a close eye on the pound, which slipped to $1.6263 from $1.6280, ahead of Thursday's Scottish independence referendum, with the "No" vote appearing to have the edge in polls.