The dollar hit a 14-month high against the yen on Wednesday on expectations that Federal Reserve Chairman Alan Greenspan will paint a rosy picture of the U.S. economy later in the day. The euro also climbed a three-month peak versus the yen and jumped against the dollar after a series of stop-loss orders were breached. Traders said the low-yielding yen has suffered from a slump in demand as investors flock to the dollar due to the interest rate advantage the U.S. currency has over its rivals. "Insurance firms, pension funds, trust banks and mutual funds for retail investors are all constantly buying the dollar since the currency just keeps rising," said Mitsuru Sahara, senior vice president of forex at UFJ Bank in Tokyo. Many market participants expect the Fed chief's semi-annual testimony before Congress -- starting at 1400 GMT -- to echo his comments earlier this week that the economy is set to expand at a moderate pace despite rising oil prices. That would support the Fed's tightening policy, under which the central bank has raised its funds rate by 25 basis points on nine occasions since June 2004 to 3.25 percent. Euro zone rates have limped along at 2 percent for two years, while Japanese rates have been stuck near zero percent for even longer. Higher U.S. rates heighten the appeal of dollar-denominated deposits and expectations that the Fed will continue to lift rates to around 4 percent by the end of the year have spurred dollar buying this year. "The biggest losers of the latest round of dollar strength have been low-yielding currencies like the yen," said a trader at a U.S. brokerage. "The selling could continue if we hear something hawkish from Greenspan. At 0540 GMT, the dollar bought around 113.10 yen its highest level since May 2004. The euro was at 136.60 yen after rising a full yen from late U.S. levels to around 136.70 yen a high since late April.