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Dollar Rises to 5-Year High Versus Yen as Fed Trims Bond Buying

The dollar rose to a five-year high versus the yen after the Federal Reserve officials voted to reduce monthly asset purchases that are seen as debasing the U.S. currency amid signs that economic growth is strengthening.

The U.S. currency gained against most of its major peers after the central bank announced plans to cut its monthly bond purchases to $75 billion from $85 billion, taking its first step toward unwinding the unprecedented stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from the worst recession since the 1930s. The Fed acted as a report showed housing starts last month reached a five-year high and the Labor Department reported Dec. 6. the unemployment rate declined to 7 percent in November, the lowest in five years.