Yen Soars as Oil Prices Reach $100, Dollar Falls Modestly

The Japanese yen surged to seven-month highs on Wednesday as traders reacted to oil prices breaking above $100 per barrel. Brent crude futures rose nearly 3% to top $100 for the first time since late July, weighing on global markets ahead of U.S. inflation data on Friday.

The dollar fell modestly, with some analysts attributing its weakness to the yen's rapid rise over the past week and investors positioning ahead of upcoming central bank meetings.

OCBC strategists noted that the latest Middle East escalation has kept Federal Reserve policy implications from higher energy prices in focus, particularly after last week's strong U.S. payrolls report revived expectations of a rate hike next week.

The yen rallied, leaving the dollar down 0.4% on the day at 153.38 yen, just shy of Tuesday's seven-month high of 152.89.