Dollar is rising and yen is approaching a level that previously called for intervention

The dollar climbed back to September’s highest levels in years on Tuesday, as investors worried about rising interest rates and geopolitical tensions, while the Japanese yen fell close to the level that called for intervention last month.

Strong US labor market data and expectations of continued inflation expected to be announced on Thursday sharply raised expectations of further interest rate hikes until 2023 and pushed the dollar back to its highest levels since 2002, recorded in September.

The risk appetite was also undermined after Russia rained missiles on Ukrainian cities on Monday in response to an explosion that destroyed the only bridge linking Russia to Crimea, which it annexed years ago.

By 0759 GMT, the dollar index rose 0.2 percent to 113.27, slowly returning to a 20-year high of 114.78, which it touched late last month.

The yen fell to 145.86 to the dollar in trading until this morning, a small difference from the lowest level in 24 years at 145.90 to the dollar it touched before the Japanese government intervened to support it three weeks ago. And settled in the latest trading at 145.63 per dollar.

Japan’s Chief Cabinet Secretary Hirokazu Matsuno reiterated on Tuesday the government’s readiness to intervene, saying that “appropriate steps will be taken to counter excessive movements in the foreign exchange market.”

The euro remained largely unchanged at $0.9699, halting four days of losses that saw the currency drift towards a 20-year low of $0.9528, which it touched on September 26.

The British pound fluctuated, falling to its lowest level since September 29 at $1.0999. The pound was last down 0.4 percent to $1.10185.

Meanwhile, the risk-sensitive Australian dollar hit a two-and-a-half year low of $0.62475 on Tuesday.

The Chinese yuan fell against the rising dollar, as the increase in Corona injuries again weakened the economic outlook.