The dollar and euro rose to five-year highs against the yen on Friday, driven by upbeat U.S. data before the Federal Reserve’s meeting next week and dwindling excess cash in the euro zone banking system.

The yen also slumped to a three-decade low against the Swiss franc, with some attributing the broad-based decline to a resumption of its role as a conduit for carry trades given the Japanese central bank’s continued commitment to an ultra-easy monetary policy.

The franc has been buoyed by Swiss banks repatriating money before the year-end.

The dollar rose 0.2 percent to 103.57 yen, having hit 103.925 yen in Asian trading, its highest level since October 2008. The euro earlier hit 142.82 yen and was recently flat against the yen at 142.14 yen.

So far this year the dollar has gained 19 percent against the yen while the euro has risen 24 percent, on expectations the Bank of Japan will provide even more stimulus next year.

The dollar found strength from upbeat U.S. retail sales data and the smooth passage through the House of Representatives of a budget deal to avoid a government shutdown.

Both are seen as adding to the possibility the Fed could start scaling back its massive bond buying stimulus as early as next week, although the consensus is still for March.

The dollar was supported by rising Treasury yields, with the yield differential of two-year U.S. bonds over German two-year yields rising.

“The economic fundamentals are so much better than in May and June when (the Fed) started talking about this (tapering),” said Marshall Gittler, head of global FX strategy at IronFX Global, who thinks the Fed will begin tapering next week.

“If they thought it was a good idea in May, then they must think it’s an even better idea now.”

He said he expects dollar/yen to reach 130 yen by the end of next year as Japan’s economic struggles come to the fore.

“A lot of tapering-related long dollar positions were flushed out last week,” said Ian Gunner, portfolio manager at Altana Hard Currency Fund. “Now they’re starting to come back.”

The Swiss franc rose to 116.68 yen, its highest level since early 1983, in Asian trading although it later fell back to 116.23 yen.

“(It’s) driven by Japanese banks funding the global carry trade in a risk-on environment, while Swiss banks are reducing the size of their balance sheets, cutting foreign exposure,” said Morgan Stanley analysts in a note.

The euro received support as two-year swap rates rose to their highest levels in a month. The European Central Bank said on Friday that banks will return 22.65 billion euros of crisis loans, above analysts’ forecasts, to it next week, tightening liquidity in the bloc.

Citi strategist Valentin Marinov said this can help push the euro higher for now but it isn’t positive for the euro longer-term as tightening liquidity hits lending and growth.

Liquidity usually tightens towards the end of the year, when banks hold off from lending to each other.

The euro has shrugged off some poor recent economic data, particularly in France, to surprise many analysts and move higher since the summer.

This year, another factor driving euro strength is European banks repatriating funds to shore up their capital bases before a European Central Bank Asset Quality Review (AQR).

The Australian dollar fell to its lowest in more than three months after central bank governor Glenn Stevens said he would prefer to see the local dollar lower as a boost to trade-exposed sectors of the economy. It was recently down 0.2 percent at $0.8919.