The dollar appears to be in a "decent" uptrend against the yen from Monday's low, according to one-hour chart analysis from Matt Simpson, senior market analyst at Stone X. The dollar-yen pair has been testing the weekly "R1" pivot point while holding above its daily, weekly, and monthly volume-weighted average prices. However, Simpson notes that July's volume point of control at 162.69 yen aligns with last week's high and could provide resistance. The analyst adds that the US inflation report due later today may determine whether a meaningful breakout or deeper pullback occurs. The dollar was 0.1% lower at 162.32 yen.

Asian currencies consolidated against the dollar in early trade but faced pressure from risk-off sentiment. Carol Kong, economist and currency strategist at CBA, cited renewed concerns about energy supply disruption in the Strait of Hormuz weighing on risk appetite. Kong warned that the flare-up of military confrontation between the U.S. and Iran risks pulling AUD/USD down to support at 0.6847. The Australian dollar was little changed at US$0.6918, while the U.S. dollar was flat at 162.41 yen and steady at 33.50 baht.