Yen Holds Firm as Ukraine-Russia Tension Escalates

On Tuesday, the yen exchange rate hit a 3-year low as energy prices hiked, spilling concerns on inflation. 

The USD/JPY pair tumbled 0.19% to $113.08 after the greenback reached a 5-month high.

In addition, the EUR/JPY pair slumped 0.07% or $130.78 as the GBP/JPY pair shed 0.12% to $153.85.

At the same time, the AUD/JPY pair weakened 0.28% to $83.04.

Accordingly, high commodity prices drove down the yen as oil costs touched multi-year highs. 

Also, the hike in US Treasury yields weighed down the Japanese currency. 

Subsequently, the benchmark 10-year yields surged to 1.62%, hitting a four-month high. 

Then, the 2-year yields soared to an 18th-month high of 0.35% as the 5-year extended 0.03 basis points to 1.08%. 

The continued sharp loss of the yen exchange rate benefited the greenback against its major peers. 

The US dollar index improved 0.01% to $94.33, nearing its one-year high of $94.50.

Correspondingly, market participants braced for the announcement of the Federal Reserve’s asset tapering in November.

Moreover, traders also looked forward to the possibility of interest rate hikes by late 2022.

Meanwhile, the euro climbed 0.04% or $1.16, stapled to its lowest levels in a year. 

Then, the Australian dollar rose 0.1% to $83.37 as it benefited from the recent hike in commodity prices.

The same with the South Korean won as it extended 0.29% to $1,198.7 after it hit a 14-month low of $1200.00. The move came after the Bank of Korea kept its interest rates unchanged. 

Likewise, the Chinese yuan edged up 0.08% to $6.46 as reports revealed that its local government widens scrutiny to private industries.  

GBP to USD Exchange Rate Slipped as Yen Fell

Conversely, the Pound sterling lost 0.01% to $1.36, trailing its Monday low of 0.15%. 

Worries on United Kingdom’s inflation caused the investors to eye the potential action of the Bank of England.

On the economic data front, the Claimant Count Change improved to -51,100 from -58,600, which is bearish towards the GBP currency. 

Consequently, the unemployment rate declined to 4.50% from July’s figure of 4.60%. 

Also, the Average earnings index diminished to 7.20% from 8.30%. Then, it came in higher than the forecasted 7.00%.

Moreover, the Canadian dollar plummeted 0.13% to $1.23 as the Swiss franc shed 0.01% to $0.93. 

Inversely, the New Zealand dollar inched up 0.22% to $0.70 as the Singapore dollar amplified 0.09% to $1.36.