USD/JPY: US Dollar retains 110.00 positions as the US Treasury yields rise

  • The US Treasuries sold off with yields rising to the highest level since summer of 2011.
  • Fed’s Willaims sees the US growth above 4% in the second quarter while the “mission is not yet accomplished” on inflation.

The US Dollar is trading flat well above 110.00 line at around 110.30 against the Japanese Yen after the rout on the US Treasury market saw the benchmark yields rising as high as 3.089% on Tuesday before stabilizing at around 3.08%.

The Big Short day on the US Treasuries is providing a solid support for the US Dollar across the board with the greenback rising near 2018 highs against both European major the Euro and Sterling earlier on Tuesday as neither of the US macro data nor central bankers comments had such a massive influence on the market.

The Bank of Japan Governor Kuroda said on Tuesday it is true that some discussions are being made at Bank’s board on side-effects of its easy policy while confirming that the Bank of Japan has no plan to move 10-year yield target for time being as inflation distant from 2% target.

On the US side, the news of the Empire State manufacturing survey jumping up to 20.1 in May, well above the market expectations and the US retail sales rising 0.3% m/m in April hit the wires just before the heat of the moment saw the US Treasuries being sold off with yields rising to the highest level since summer of 2011.

San Francisco Federal Reserve President John Williams and the upcoming New York Fed president holding a permanent seat at the rate-setting FOMC said the US economy is seen rising 4.1% in the second quarter of this year while it is too soon to declare “mission accomplished” on inflation until it reaches 2% inflation target. 

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