The Japanese yen rose to 153.53 per dollar, its strongest level since February, as traders unwound short positions and increased bets on a Bank of Japan interest-rate hike. The move extended a 1.2% gain during Monday's thin U.S. holiday session and brought the yen's advance to nearly 4% from around 160 per dollar early last week. Analysts cited expectations for faster Japanese monetary tightening, possible repatriation by Japanese investors, the unwinding of carry trades (borrowing in low-yield currencies to invest elsewhere), and U.S. political pressure as factors shifting sentiment toward the yen. The dollar index eased to 98.83, while the euro and sterling each gained 0.06%. Markets turned to U.S. inflation data ahead of the FOMC (Federal Reserve policy-setting committee) meeting on September 15 to 16, with traders pricing roughly a 60% chance of a Federal Reserve rate hike this month after stronger-than-expected nonfarm payrolls. Investors also monitored Gulf tensions after Iran threatened retaliation against new U.S. attacks on its assets, putting regional energy infrastructure, including U.S. oil and gas interests, at risk. Brent crude futures remained firmly above $97 a barrel, near a six-week high. The New Zealand dollar rose 0.1% to $0.5882, the Australian dollar was unchanged at $0.7219, and the offshore yuan held near a 3-1/2-year high at 6.708 per dollar ahead of Chinese trade data expected to show faster export growth in August.