Yen falls under pressure from US bond yields

The Japanese yen continues to retreat against the dollar since the beginning of daily trading on Wednesday, driven by the rise in US Treasury bond yields due to the famous correlation between both.

The USD/JPY rose to 151.37, compared to the previous daily close of 150.37. The pair fell to its lowest level on the trading day on Wednesday at 150.04, compared to the highest level recorded at 151.40.

US Treasury bond yields regained the upward trend on Wednesday, prompted by a smaller-than-expected decline in retail sales, which cast a shadow that consumer spending in the United States had not deteriorated significantly.

US Treasury bond yields rose to 4.548% compared to the closing recorded in the last session at 4.445%. The highest level of these returns reached 4.560%, compared to the lowest level, which was recorded at $4.28%.

The pair had reached its highest levels in about a year at the end of last week following a speech by Jerome Powell, Chairman of the Federal Reserve, which he made at the end of last week, referring to the future path of the federal interest rate and questioning whether the Fed had raised interest rates sufficiently to reduce inflation to the central bank’s target.