Dollar Hovers Near Seven-Month Low Against Yen Amid Escalating Conflict

The US dollar is hovering near a seven-month low against the yen 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. The dollar was down 0.4 percent at 153.40 yen, not far from Tuesday's seven-month low of 152.89.

Kevin Ford, FX & Macro strategist at Convera, noted that 'the main story here is that the US policy premium is putting a cap on the dollar's advance and we have the yen strengthening with the support of the US Treasury.'

The escalation of conflict in the Middle East, particularly between Iran-backed Houthis and Saudi Arabia, has pushed oil prices above $100 a barrel. Brent crude futures rose 3.5 percent, which has weighed on global markets ahead of US inflation data due on Friday and central bank meetings next week.