Yen records biggest weekly drop in over two months, dollar climbs for the week

The US dollar climbed about 0.7 percent for the week, with the dollar index at 101.46, while the yen recorded its biggest weekly drop in over two months as the dollar hit 163.81 against the yen, its strongest since November 1986. Renewed strikes in the Iran war pushed oil prices higher (Brent touched a two-month high near 102 dollars), reigniting inflation fears and boosting expectations of a US Federal Reserve rate hike, now priced at 35.8 percent from 12.8 percent a week earlier. The US Treasury urged the Bank of Japan to raise rates, but markets have priced out any BOJ hike next week, with the euro also slipping nearly 0.6 percent on the week after the ECB kept rates unchanged.