The dollar was firm on the last trading day of the year, poised to clock strong gains in 2024 against most currencies as investors prepared for fewer U.S. rate cuts and the incoming Trump administration's policies.

The dollar's ascent, buoyed by rising Treasury yields, has pushed the yen toward its lowest levels since July, when the Japanese authorities last intervened. On Tuesday, it was at 157.02 per dollar, on course for a 10% drop in 2024, its fourth straight year of decline against the dollar.

Japanese markets are closed for the rest of the week, and with most markets closed on Wednesday for the New Year's Day holiday, volumes are likely to be razor thin.

That has left the dollar index , which measures the U.S. currency versus six other major units, at 108.06, not far from the two-year high it touched this month. The index has risen 6.6% in 2024 as traders cut back on bets of deep rate cuts next year.

The Federal Reserve shocked markets earlier this month by cutting their interest-rate forecast for 2025 to 50 basis points of cuts, from 100 basis points, wary of stubbornly high inflation.

Goldman Sachs strategists though expect three rate cuts from the Fed next year, confident that inflation will still trend lower.

"We see the risks to interest rates from the second Trump administration's policies as more two-sided than widely assumed," they said in a note.

The dollar has also been boosted by expectations President-elect Donald Trump's policies of looser regulation, tax cuts, tariff hikes and tighter immigration will be both pro-growth and inflationary and keep U.S. yields elevated.