Yen under pressure as US Treasury yields push over-decade peaks
By Rae Wee
SINGAPORE (Reuters) — The yen was held at the mercy of soaring U.S. Treasury yields on Friday ahead of a closely watched rate decision by the Bank of Japan (BOJ), while the dollar stood near a six-month peak on the prospect of higher-for-longer U.S. rates.
The Japanese currency was last marginally lower at 147.6 in early Asia trade, languishing near the previous session's more than 10-month low of 148.465.
The BOJ is due to announce its interest rate decision later on Friday at the conclusion of its two-day policy meeting, capping off a week packed with central bank policy decisions, and expectations are for the BOJ to stand pat on its ultra-easy monetary settings.
«Whilst we feel more confident that (the BOJ) can achieve their 2% (inflation) target, we believe there won't be any changes until 2024, with key focus the Shunto (spring wage) negotiations starting next year,» said Daniel Hurley, portfolio specialist for emerging market and Japanese equities strategy at T. Rowe Price.
Data on Friday showed Japan's core inflation was steady in August and stayed above the central bank's 2% target for a 17th straight month.
The yen was also kept under pressure as a result of elevated U.S. Treasury yields, which scaled multi-year highs in the previous session as markets reeled from a hawkish pause by the Federal Reserve on Wednesday.
The 10-year Treasury yield, which the dollar/yen pair tends to track, peaked at 4.4980% on Thursday, its highest since 2007, while the two-year Treasury yield scaled a 17-year top of 5.2020% the same day. [US/]
The U.S. dollar likewise rode Treasury yields higher and against a basket of currencies, the greenback touched a more than six-month high of 105.74 in the previous session. The
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