The yen stumbled on Tuesday as U.S. Treasury yields rose to new near two-year highs and the Bank of Japan stressed its resolve to maintain ultra-loose monetary policy, though firmer yields did little for the greenback against other currencies.
"The global reflation trade and rising U.S. yields are pointing to depreciatory pressures on the yen," said Carlos Casanova senior Asia economist at UBP.
U.S. two-year yields, which track short-term rate expectations, crossed 1% for the first time since Feb. 2020, and were last at 1.036%, up nearly 7 basis points.
"Moreover, the Bank of Japan is expected to keep conditions ultra-accommodative for longer, while any rise in inflation will only be modest, around 1.0% in 2022," Casanova added.
Bitcoin was in the doldrums at $42,000, having been trending downwards since hitting its record high of $69,000 in November.
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