Dollar Hits Seven-Month Low as Yen Strengthens Amid Escalating Middle East Conflict

The US dollar traded near a seven-month low against the yen on Wednesday due to the yen's sharp gains over the past week and shifting expectations ahead of policy decisions from the Federal Reserve and Bank of Japan.

Federal Reserve and Bank of Japan policy implications are in focus, particularly after last week's strong US payrolls report revived expectations of a rate hike next week.

The yen has strengthened broadly, not only against the dollar but also versus the euro and sterling, as well as against popular carry-trade currencies such as the Mexican peso and Turkish lira.