Yen's Rally Pauses as Dollar Firms Amid Inflation Worries

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

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

The yen has surged more than 5% so far this quarter. Traders and analysts point to factors such as bets on a faster pace of Bank of Japan tightening, potential for Japanese investors to repatriate their funds, unwinding of carry trades, and U.S. political pressure.