The Euro is rising in a surprise move driven by flows linked to Japan

The euro rose on Friday in a move that traders said may be driven by an expected demand for the single currency stemming from plans by a Japanese bank to buy multi-billion dollar German aviation business.

The single currency recorded a jump in late Asian trading on Friday, which saw the euro rise to its highest level in two and a half weeks.

The euro rose 0.35 percent to $ 1.1289 after touching $ 1.1294, its highest level since March 26. The single currency also rose around 0.4 percent to 126.23 yen, its strongest level since March 21.

Traders said speculators were buying the euro in response to reports that Japan's Mitsubishi UFJ plans to buy aviation finance activity at Deutsche Bank AG.

The dollar index, which tracks the performance of the greenback versus a basket of rival currencies, fell on pressure from the euro's rise of 0.2 percent to 96.991, shedding most of the gains made in the previous session.

With the dollar down broadly, sterling rose 0.2 percent to $ 1.3078, erasing most of the day's losses.

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