The U.S. dollar strengthened to a 10-month high against the Japanese yen on Wednesday, continuing a sustained rally amid diverging monetary policy expectations between the Federal Reserve and the Bank of Japan.

The dollar traded at 155.52 yen, its highest level since January 28, 2025, after gaining 0.16% during the session. This marks the currency's third consecutive day of gains, representing its largest three-day percentage advance since November 12. The dollar has now risen against the yen in seven of the past eight trading sessions.

Despite the recent strength, the dollar remains 1.80% below its 52-week high of 158.36 reached in January 2025. However, it has surged 10.40% from its April 2025 low of 140.868.

The sustained upward pressure on the dollar-yen pair reflects ongoing market expectations that interest rate differentials between the United States and Japan will remain wide, with the Federal Reserve maintaining higher rates for longer while the Bank of Japan proceeds cautiously with policy normalization.