The U.S. dollar was supported by new bets on U.S. rate hikes on Tuesday, while investors unloaded the Japanese yen and sent it spearing below the psychological 120 level as the central bank looks increasingly isolated in its dovish policy stance.
Importantly, the yen crosses also suffered, with the euro making a five-week high of 132.33. The Japanese currency fell to a four-year low against the Australian dollar. It dropped to a 6 ½ year low against the Swiss franc.
On Tuesday, the Bank of Japan’s Governor Haruhiko Kuroda made an interesting comment. He stated that Japan must contain an ultra-loose monetary policy.
Two-year, five-year, 10-year and 30-year Treasury yields all stood at the highest in a long time on Tuesday, widening the gap on pinned Japanese yields while lending the U.S. dollar broad support elsewhere.
Yen, euro, pound, and yuan
The yen was not the only major currency that suffered losses on Tuesday. The euro dropped 0.2% against the U.S. dollar to $1.0988.
The Australian dollar and New Zealand dollar dropped 0.1%.
The U.S. dollar index which tracks the U.S. currency against a basket of currencies gained 0.2% to 98.700. The British pound fell 0.2% to $1.3144.
The world’s most-famous cryptocurrency bitcoin gained 5% to $43,337, its best result in several weeks.