The US dollar maintained a two-month high on Thursday, driven by increasing market anticipation of further interest rate increases by the Federal Reserve throughout the year. This surge in the dollar is placing significant downward pressure on the Japanese yen, bringing it closer to levels that could prompt intervention from Japanese authorities. Investors are reacting to signals suggesting the Fed may adopt a more hawkish monetary policy to combat inflation. The yen has weakened considerably as a result of the diverging monetary policies between the US and Japan, where the Bank of Japan has maintained its ultra-loose policy. Analysts are closely watching the yen’s movement, anticipating potential currency intervention if it depreciates further. The dollar’s strength impacts global markets, affecting trade and investment flows.