The dollar rose to a 26-month high against the yen before a U.S. report that economists predict will show U.S. employers resumed hiring in October. Against the yen, the dollar rose to 117.62 yen at 9:30 a.m. in London, from 117.21 yen late yesterday in New York and 115.68 yen on Oct. 28, according to electronic foreign-exchange dealing system EBS. It climbed as far as 117.79 yen today, the highest since Aug. 22, 2003. The dollar was at $1.1943 per euro from $1.1945. The dollar's surge was spurred on by Japanese investors after local markets were closed yesterday for a holiday, said Kazuhiro Nishina at Aozora Bank in Tokyo. ``Japan's investors missed the chance to buy dollars with the holiday so today they rushed in to sell yen and buy the U.S. currency,'' said Nishina, manager of the bank's derivatives marketing group. The dollar may rise to 118.50 yen today, he said. The U.S. economy added 120,000 jobs last month, according to a survey of 70 economists polled by Bloomberg News. Payrolls shrank 35,000 in September. The report is due to be released at 8:30 a.m. in Washington. Tanigaki Comments Japanese officials, including Finance Minister Sadakazu Tanigaki, have indicated they aren't concerned about the yen's decline and probably won't try to stem the slide in the currency any time soon, said Niels Christensen, a currency strategist at Societe Generale SA in Paris. ``Officials aren't too concerned about the fall in the yen as long as it is orderly, because it only helps to end deflation and boost exports,'' he said. ``It's difficult to see what could stop the current trend of yen weakness.'' Tanigaki told a press conference in Tokyo today the yen is ``overall moving in line with the fundamentals of economies.'' The yen has fallen nearly 13 percent against the dollar this year as the Fed raised borrowing costs to keep inflation in check and the Bank of Japan kept rates near zero percent. The Fed on Nov. 1 lifted its key rate by a quarter point to 4 percent. `Cautious and Slow' The yen remained lower after People's Bank of China Governor Zhou Xiaochuan said the country's economy is flexible enough to withstand a more freely traded currency. Japan's currency failed to advance after the comments because investors realize China is moving in a ``cautious and slow'' manner, Halpenny said. The yen surged 2.3 percent on July 21 when China revalued the yuan. The yen surrendered almost all the gain in the following three days. UBS Securities economists raised their forecast for how far the Fed will increase interest rates. UBS joined firms including JPMorgan Chase & Co. and Goldman, Sachs & Co., which earlier said the Fed's target rate will climb to 5 percent by June 30. The UBS economists said yesterday in a research report they expect the central bank to lift its target rate to 4.5 percent in January and keep it there for the rest of 2006. ``We expect the Fed to get to 4.5 percent before considering a pause, and there is a risk they will go further than that,'' said Robert Rennie, chief currency strategist at Westpac Banking Corp. ``That's unequivocally positive for the U.S. dollar.'' The U.S. currency may gain to $1.18 versus the euro by the end of the year, Rennie said. `Supportive for Dollar' The dollar's advance versus the yen this week was anticipated in a Bloomberg survey of traders and strategists published on Oct. 31, in which more people recommended selling the yen against the U.S. currency than buying it. ``The widening U.S. rate gap over Japan and the euro region is strongly supportive for the dollar,'' said Minoru Shioiri, a currency manager in Tokyo at Mitsubishi UFJ Securities Co., a unit of the world's biggest lender by assets.