Yen Rally Pauses as Dollar Firms Amid Inflation Worries

The Japanese yen paused its rally to near seven-month highs on Tuesday after strengthening to as much as 152.89 per dollar, surpassing levels reached during Japan's July intervention and hitting its strongest since February.

However, the currency pulled back to trade at around 154 through London and early New York hours, broadly flat on the day.

The dollar index, which tracks the U.S. currency against six others, edged nearly 0.2 per cent higher.

Traders are pointing to a slew of factors that are turning away bears, including bets on a faster pace of Bank of Japan tightening and the potential for Japanese investors to repatriate their funds.