Dollar holds steady as yen nears 40-year low amid US-Iran tensions

The US dollar held largely steady on Thursday as heightened tensions between Washington and Tehran increased demand for the currency as a safe-haven asset, while the Japanese yen continued to weaken near its lowest level in 40 years with little sign of a reversal.

The dollar index, which measures the greenback against a basket of major currencies, was unchanged at 101.11. The dollar’s strength contributed to higher oil prices and stoked inflation concerns.

Brent crude futures rose more than 1.3% on Thursday to $95.31 a barrel.

Yields on two-year US Treasury bonds climbed to a 17-month high on Wednesday, as rising oil prices fueled inflation fears and increased the likelihood of further US interest rate hikes.

The euro edged up 0.02% to $1.1412, while the Australian dollar slipped 0.1% to $0.6989, and the New Zealand dollar fell nearly 0.1% to $0.5811.

Sterling last traded at $1.3373. The Japanese yen rose 0.02% to 163.1 per dollar, erasing earlier gains, after falling to 163.23 per dollar on Tuesday—its weakest level since December 1986.