The U.S. dollar climbed to a four-month high of ¥149.04 in late New York trading on 15 July before easing to the high-¥148 range, extending a 10-day rally in the Dollar Index. Options positioning in short-dated contracts turned net bearish on the yen for the first time since September 2022, underscoring renewed pressure on the Japanese currency. Stronger-than-expected U.S. inflation data spurred the move. The Labor Department said consumer prices rose 0.3% in June and 2.7% from a year earlier, both quicker than in May. Benchmark 10-year Treasury yields advanced to about 4.49%, prompting traders to pare back expectations for Federal Reserve rate cuts this year to roughly 44 basis points, from just under 50 bp before the data. The yen’s slide was compounded by domestic political uncertainty ahead of Japan’s upper-house election on Sunday. Polls suggest the ruling coalition could lose seats, fuelling speculation that a more fiscally expansive opposition bloc may gain influence and widen the U.S.–Japan rate differential further. Analysts said intervention risks remain limited for now because the currency has not yet breached the psychologically important ¥150 mark, but warned that a sustained break above that level could invite a sterner response from Tokyo.