The yen weakened into the low ¥154 range against the dollar in New York after the U.S. Labor Department reported a 5.4% year-over-year rise in August producer prices, above the 5.3% market consensus. At 9 a.m., the dollar-yen pair traded at ¥154.30–40, down 0.82 yen from the previous day’s 5 p.m. level, and briefly reached about ¥154.67. Higher U.S. long-term yields, Middle East tensions and a rise in crude oil futures above $100 a barrel encouraged dollar buying. The yen’s broader rebound from around ¥164 has revived concerns about yen-funded carry trades, although expectations for accelerated Bank of Japan tightening continue to provide support. BOJ Policy Board member Masui said financial conditions remained accommodative and that the policy rate should be raised to prevent underlying inflation from significantly exceeding 2%. Markets are therefore weighing persistent U.S. inflation, which could slow Federal Reserve easing, against the prospect of higher Japanese rates. The BOJ’s policy outlook, U.S. yields, oil prices and Middle East developments remain the main drivers of the yen.