The dollar surged to a 13-year high against the yen as a reportshowed U.S. payrolls climbed in May, boosting the case for theFederal Reserve to raise interest rates this year.

The U.S. currency gained against most of its major peers afterthe jobs gain exceeded forecasts and worker pay gains accelerated.The Fed is likely to tighten monetary policy this year if the labormarket improves further, William C. Dudley, president of theFederal Reserve Bank of New York, said in a speech in Minneapolis.Futures prices showed a better-than-50-percent chance the centralbank will increase rates by its September meeting, according toBloomberg data.

“The king-dollar trade remains on,” Matt Weller, an analyst atGain Capital Holdings Inc.'s Forex.com unit in Grand Rapids,Michigan, said by phone. “This puts September right in thecrosshairs in terms of a Fed rate hike. I'm still optimistic on thedollar.”