Global currency markets traded cautiously on Thursday as investors assessed rising oil prices, higher bond yields and upcoming US inflation data. Energy-driven inflation concerns pushed benchmark 10-year US Treasury yields to their highest level since 2023. The dollar gained modest support, weakening the euro to $1.1633 and sterling to $1.3547. The yen paused its strong rally and traded near 153.70 per dollar after touching seven-month highs, ahead of an anticipated Bank of Japan rate increase. The dollar index edged up to 98.81, recovering slightly from a three-week low. Broader Asian currencies also weakened as oil prices increased.

The Japanese yen held firm at 158.88 per US dollar on Thursday after a sudden 0.9% surge fuelled speculation about possible official intervention. The stronger yen pressured the dollar ahead of a crucial US jobs report, with the dollar index easing 0.04% to 99.56. The euro edged up to $1.1589, sterling recovered to $1.3482, while the Canadian dollar held at C$1.3836 after the Bank of Canada maintained interest rates.

The US dollar held near a two-week high on Monday after Federal Reserve Chair Kevin Warsh’s hawkish remarks strengthened expectations of a September interest-rate hike. The yen weakened beyond the closely watched 160-per-dollar level, while the euro rose 0.1% to $1.1591 and sterling remained steady at $1.3539. The dollar index eased to around 99.6 but stayed near its strongest level since August 17. Despite the recent rebound, it remained on course for a second consecutive monthly decline.