LONDON: The dollar edged back towards September’s multi-year highs on Tuesday as worries about rising interest rates and geopolitical tensions unsettled investors, while the yen hovered near the level that prompted last month’s intervention.

Strong US labour market data and an expectation that Thursday’s inflation figures will remain stubbornly high have all but dashed bets on anything but high-interest rates through 2023 and are driving the dollar back towards the 2002 peak hit last month.

Risk appetite was also hurt after Russia rained missiles upon Ukraine’s cities on Monday in retaliation for the blast that damaged the only bridge linking Russia to the annexed Crimean peninsula.

“The general narrative is a risk-off one,” said Francesco Pesole, FX strategist at ING, citing the escalation of the conflict in Ukraine and new US export controls, which included a measure to cut China off from certain semiconductors.

“There are the Fed minutes and US CPI this week will be quite important for strengthening hawkish Fed expectations and could continue to support the dollar,” Pesole added.

By 0759 GMT, the dollar index was up 0.2% at 113.27, inching toward the 20-year high of 114.78 it touched late last month.

The yen hit 145.86 per dollar overnight, just short of the 24-year trough of 145.90 touched before the Japanese government stepped in to prop it up three weeks ago. It was last flat at 145.63 per dollar.

Japan’s chief cabinet secretary Matsuno on Tuesday reiterated the government’s willingness to intervene, saying that they will take “appropriate steps on excess FX moves”.

Fear of intervention has helped the yen firm in recent weeks, but as it drifts back to multi-decade lows, analysts were keeping an eye on whether the Bank of Japan will step in again.

“It’s not that easy to gauge at which level the Bank of Japan will intervene,” ING’s Pesole said.

“It’s mostly a matter of how orderly the depreciation in the yen is,” Pesole added, although he doubts the BoJ would be comfortable with the yen at 150 per dollar.

The euro was little changed at $0.9699, stemming four days of losses which have seen the currency drift towards the 20-year low of $0.9528 it touched on Sept. 26.

Britain’s markets remain on edge and not exactly soothed by the Bank of England (BoE) stepping up bond buying and finance minister Kwasi Kwarteng promising to bring forward some budget announcements.

On Tuesday, the BoE acted again to stem a collapse in the government bond market by announcing a move to purchase inflation-linked debt until the end of the week.

Adding to the BoE’s headaches was labour market data that showed Britain’s unemployment rate fell to its lowest since 1974 in the three months to August, but the drop was driven by a record jump in the number of people leaving the labour market.

Sterling wobbled, sliding to its lowest level since Sept. 29 at $1.0999. The pound was last down 0.4% at $1.10185.

Meanwhile, the risk-sensitive Australian dollar made a 2-1/2 year low of $0.62475 on Tuesday. Analysts at the National Australia Bank said the Aussie was the market’s “whipping boy” in a sell-off and that further lows were possible in the near term as sentiment is fragile.

China’s yuan eased against the buoyant dollar despite continuing strong midpoint fixings from the People’s Bank of China, as a resurgence of COVID-19 cases, dimmed the economic outlook.