Dollar trades near 7-month low against yen as oil settles above $100

The U.S. dollar faced a seven-month low against the yen on Wednesday due to oil prices surpassing $100 a barrel and ongoing tensions in the Middle East. Investors were positioning themselves for central bank meetings in the coming week. The dollar experienced a 0.23% decline, trading at 153.65 yen, close to Tuesday's low of 152.89.

Kevin Ford, an FX & Macro strategist at Convera, suggested that expectations surrounding U.S. policy decisions are supporting the yen, which is benefiting from Treasury Department interventions. The dollar's performance was influenced by the shift in rates and the recent payrolls report, which fueled hopes of a Federal Reserve rate hike next week.

Meanwhile, the euro climbed to a two-week high, ahead of the European Central Bank's anticipated rate increase. The yen's strength was attributed to the Bank of Japan's anticipated tightening and repatriation flows from Japanese investors.