Dollar near 7-1/2-month high versus yen as central bankers reaffirm policy divergence

The U.S. dollar remained strong against the Japanese yen after the heads of the respective central banks highlighted their policy differences. Federal Reserve Chair Jerome Powell suggested that two rate hikes are likely this year, while Bank of Japan Governor Kazuo Ueda reiterated the need for further progress towards inflation targets. The dollar’s recent surge prompted concerns from Japanese officials, but intervention may be less likely this time due to a different market backdrop. The U.S. dollar index was stable while the euro and sterling saw some movement. The Australian dollar recovered slightly after Wednesday’s decline, and the Chinese yuan remained weak despite central bank intervention.