Nothing stops yen slide, falls to fresh 20 year low

div classBodysc17zpet90 cdBBJodivpBy Alun Johnp

pHONG KONG Reuters – The Japanese yen hit a 20year low against the dollar on Tuesday, supported by high U.S. Treasury yields and likely comparatively good U.S. economic data this week. pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe dollar rose 0.37 on the yen to 127.44 yen in early trade, its highest level since May 2002. p

pIt has risen 4.5 on the Japanese currency so far this month, which would be its secondbiggest monthly percentage gain since 2016 behind Marchs 5.8. p

pThe dollar was also firm against most other currencies and the dollar index was at 100.8, just off Mondays twoyear high of 100.86. p

p“I think the broad dollar trend reflects U.S. economic outperformance, while weve seen some initial impacts of higher energy prices from the Ukraine war elsewhere, especially in the euro zone,” said Carol Kong, FX strategist at Commonwealth Bank of Australia. p

pShe added that she was watching purchasing manager index data due in several markets on Friday. p

p“If we get weak PMI numbers in the euro zone or elsewhere, then markets could potentially downgrade their economic expectations but I don‘t think the US PMI will be particularly weak so we’ll see some contrast there, which would probably support the dollar,” she said. p

p“Of course, the big driver for dollar yen has been surging U.S. bond yields.” p

pThe benchmark U.S. 10year Treasury yield on Tuesday was hovering just off its threeyear high of 2.884 hit Monday, while 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. p

pJapan was watching how the weakening yen may affect the economy, as stability in the currency market was important, Finance Minister Shunichi Suzuki said on Tuesday, reiterating earlier remarks by several politicians and officials. p

pThe euro was at 1.0776, testing last weeks twoyear low of 1.0756, and sterling was also soft at 1.3006, not helped by the latest fighting in Ukraine. p

pUkraine said Russia had started an anticipated new offensive in the east of the country. p

pElsewhere, the Australian dollar edged up from Mondays onemonth low and was at 0.7355. p

pBitcoin also managed to find its feet, trading around 40,800 on Tuesday after hitting a onemonth low of 38,547 on Monday. p

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pp Reporting by Alun John Editing by Stephen Coatesp

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