The U.S. dollar index hit a one-year high on Thursday after a hawkish Federal Reserve stance led traders to ramp up bets on rate increases this year, dragging the yen to its weakest level in two years and drawing warnings from Japanese officials. The Fed held rates steady in a 3.50% to 3.75% range on Wednesday, but updated projections showed nearly half of policymakers now expect a hike this year as inflation concerns mount. The dollar index rose 0.24% to 100.59, reaching 100.8, its highest since May 2025, while the yen weakened to as low as 160.94 per dollar, its lowest since July 2024. Chief Cabinet Secretary Minoru Kihara said Japan is ready to respond appropriately to currency moves as needed at any time. The euro fell 0.17% to $1.1479 and sterling dropped 0.35% to $1.3245, both hitting more than two-month lows.