US Dollar Climbs Amid Inflation Anticipation and Russian Sanctions

The US dollar edged higher against the yen on Thursday as traders awaited the release of US consumer inflation data, scheduled for Friday. This data is crucial for determining the annual cost-of-living adjustment for the US Social Security Administration for 2026. All eyes are on how this will shape economic forecasts.

In a related move, fresh US sanctions on major Russian oil companies, Rosneft and Lukoil, sent oil prices soaring nearly 5%. These sanctions compound with British measures from last week and are seen as pressure against Russia over its actions in Ukraine. The sanctions weakened the yen and other currencies linked to oil imports.

Market activity also swirled around Japan's political developments, where fiscal dove Sanae Takaichi was installed as prime minister, driving speculation about potential stimulus packages and monetary policies. Meanwhile, smaller European currencies gained strength as oil prices bolstered investor confidence.