Dollar Surges as Oil Prices Rise, Yen Falls to New Lows

The dollar is poised for its biggest weekly gain since mid-June as oil prices continue to rise, causing inflation concerns that have rekindled expectations of a rate hike by the U.S. Federal Reserve.

The yen, on the other hand, is set for its largest weekly percentage decline in over two months, falling to 40-year lows despite Japan's efforts to support the currency.

Verbal attempts by Japanese officials to bolster the yen have had muted results, with Finance Minister Satsuki Katayama reiterating the government's readiness to take action in the foreign exchange market.

Some analysts believe that another intervention by Japanese officials would only have a short-lived effect without coordinated steps such as more aggressive rate hikes by the Bank of Japan (BOJ).