London | Singapore: The dollar held firm against most peers on Friday, as a peace deal between the U.S. and Iran hung in the balance, pinning the yen around a two-year low, a break beyond which would take the Japanese currency to its weakest in 40 years.The dollar climbed as high as 161.8 yen late on Thursday, closing in on July 2024's 161.96. Any higher would take it to its strongest against the yen since 1986.Also Read: Dollar sees 'bullish break' on Fed rate-hike betsIt was last at 161.3 on Friday, steady on the day, but traders were still braced in case Japanese authorities stepped into markets directly to prop up the currency as they did in late April and early May. The dollar has surged this week, rising 1% against a basket of other major currencies, to a 13-month top, partly thanks to Wednesday's Federal Reserve meeting in which policymakers' new quarterly projections showed nine of 19 of them now anticipate a rate hike by year end."In the near term, the dollar may enjoy post-Fed enthusiasm for a bit longer, with markets probably keen to fully price two hikes by December at the first strong data print," said Francesco Pesole, currency strategist at ING.He added in a note that the holiday in the U.S. meant there was "a lower-liquidity backdrop, a window during which Japanese authorities have previously shown a preference to intervene".Also Read: Dollar jumps as Fed holds rates but projects one hike later this year"(Dollar/yen) is already deep into intervention territory ... A lack of intervention today would leave scope for speculators to push towards 162-163 given the supportive (dollar) environment." Weighing on the yen are Japanese interest rates, which are much lower than those elsewhere, even after the Bank of Japan hiked interest rates to a 31-year high this week.