The U.S. currency jumped to its highest point in 20 years against the Japanese yen on Tuesday. The U.S. dollar also tester a two-year against the euro. The greenback reached great results versus the currencies mentioned above thanks to U.S. Treasury yields.
Ten-year U.S. inflation-linked bond yields are within touching distance of turning positive for the first in a long time.
The dollar index, which measures the U.S. currency against six other currencies, surpassed 101 for the first time in more than two years. The index was flat at 100.84 at 11:55 GMT.
The U.S. currency’s gains have been most striking against the Japanese currency. The U.S. dollar jumped to 128.46 yen, its best result since May 2002. Moreover, the U.S. currency was last up 1.3% at 128.20 yen.
The U.S. dollar has risen 5.4% on the yen so far this month, which would be the U.S. dollar’s biggest monthly percentage gain since 2016.
Meanwhile, the Bank of Japan has been intervening to keep the yield on Japanese 10-year government bonds around 0% and no higher than 0.25%.
Many investors are betting the Japanese currency has further to fall. On Tuesday, Japanese Finance Minister Shunichi Suzuki made the most explicit warning regarding the yen, saying the damage to the economy from a weakening economy at present is greater than the benefits from it.
Dollar, franc, euro, and the British pound
The U.S. dollar jumped to its highest of 0.9492 since July 2020 against the Swiss franc.
The euro recovered some grounds, trading 0.1% higher against the U.S. dollar at $1.07935, but stayed close to last week’s two-year low of $1.0756.
The British pound was flat at $1.3019, in sight of its 17-month low against the U.S. currency of $1.2973, it fell last week.
