The dollar rose to a two-week high versus the yen on Wednesday, lifted by higher Treasury yields as global inflation worries flared anew.

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The dollar index, which measures the currency against six major peers, including Japan's, rose 0.19 percent to 101.94, extending a 0.38 percent rally from Tuesday, when data showed euro-area consumer inflation soaring to a record.

The greenback climbed 0.28 percent to 129.07 yen, and earlier touched 129.18 for the first time since May 18. Benchmark 10-year Treasury yields touched 2.88 percent overnight, the highest since May 19.

The euro slipped 0.15 percent to $1.07, continuing its retreat from the more-than-one-month peak of $1.07 hit on Monday after the European Central Bank shifted to a more hawkish posture.

The dollar index swooned to a one-month low of 101.29 on Monday after pulling back from a nearly two-decade high above 105 reached in mid-May, as US inflation and other economic indicators showed signs of peaking amid the Federal Reserve's aggressive policy tightening.

Markets have priced half-point interest rate rises for the Fed's meetings this month and next, in line with what policymakers have been signalling, but the outlook beyond that is murky. A closely watched monthly US jobs report, due on Friday, may offer new clues.

"It's still too early to call a long-term DXY peak," Westpac strategists wrote in a client note, referring to the dollar index. "An aggressive 180bp in ECB rate hikes are priced through to end-2023, about the same as the Fed, yet it's hard to see the ECB moving toe to toe."

The dollar index could range between 101 and 105 for "a while" before its bull trend resumed, they wrote.