Yen retreats to 4-week lows versus surging dollar

The dollar rose today, boosted by higher US bond yields ahead of key inflation data later in the week and strengthened against the Japanese yen. The dollar reached as high as 157.715 yen, edging closer to levels that led to bouts of likely intervention from Tokyo at the end of April and early May.

It was last at 157.665 yen, up 0.3% on the day. The yen is believed to continue to be a grind higher for dollar/yen, all across yen pairs as well. Earlier in May, slightly softer US consumer price inflation data this month weakened the dollar across the board.

Since then, US Treasury yields have resumed their climb, with the benchmark 10-year yield at its highest in almost four weeks at 4.57%. The main drivers were Tuesday’s lackluster auction of two- and five-year notes that raised doubts about demand and data showing U.S. consumer confidence unexpectedly improved in May.

The US dollar index was last up 0.43% at 105.11. The U.S. core personal consumption expenditures (PCE) price index report – the Federal Reserve’s preferred measure of inflation – will be released on Friday. Expectations are for it to hold steady on a monthly basis.