TOKYO, Dec 28 — The dollar edged higher against its major peers today, reaching a more than one-week top versus the yen, buoyed by higher Treasury yields as traders puzzled over the outlook for policy at the world’s biggest central banks.

The US currency ticked 0.13 per cent higher to ¥133.685 in Asian trading, and earlier touched 133.95 for the first time since December 20, when the Bank of Japan sent the pair spiralling lower with an unexpected loosening of the 10-year Japanese government bond yield policy band.

The greenback dropped as low as ¥130.58 that day for the first time since early August as traders speculated about an eventual end of BOJ stimulus.

A summary of opinions from the meeting, released today, showed policymakers discussed growing prospects the country could see higher wage growth and sustained inflation next year.

The dollar index, which measures the currency against six counterparts including the yen and euro, added 0.07 per cent to 104.28 on Thursday, continuing its consolidation after sliding to the lowest since mid-June at 103.44 on December 14, the day the Federal Reserve slowed interest rate hikes to a half-point pace.

Fed officials including Chair Jerome Powell though have stressed since then that the policy tightening will be prolonged, with a higher terminal rate, fueling worries of a US slowdown.

The 10-year Treasury yield, which tends to be highly correlated to the dollar-yen pair, was at 3.843 per cent in Tokyo, not far from the 1 ½-month high of 3.862 per cent reached overnight.

“The dollar is in a very interesting situation,” said Bart Wakabayashi, a branch manager at State Street in Tokyo.

“If we have a recession in the US, the Fed will have to cut rates, and obviously you will want to sell the dollar,” he said. “At the same time, if there’s a global recession, people will buy the dollar as a haven. So the dollar is in a bit of a conundrum, and you have to be really careful what currency you’re buying or selling against.”

The euro was flat at US$1.0640, tracking sideways over the past two weeks, just below the six-month high of US$1.0737 reached on December 15, when European Central Bank President Christine Lagarde stressed rate hikes would need to continue.

Sterling eased 0.06 per cent to US$1.2024, as it continued to hover just above its low for the month of US$1.1993, reached on December 22.

The Australian dollar was flat at US$0.6733, while the New Zealand dollar added 0.09 per cent to US$0.6279. — Reuters