Dollar hits 1-year high against yen as inflation fears boost yields

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The dollar rose to a one-year high against the yen on Tuesday amid a rise in Treasury yields, as speedy vaccination rollouts and a massive U.S. fiscal stimulus stoked inflation worries.

The dollar hit the 110-level against the yen in Asia, its highest since March 2020. It is on track for its best month since the end of 2016. 

10-year U.S. Treasury yields climbed as high as 1.7450% in Asian trade. The 5-year note’s yield rose to as high as 0.9170%, its strongest level since March 2020.

The euro hovered near a 4 ½-month low of $1.1763 hit on Monday. Stricter coronavirus restrictions in Germany and France affected the short-term economic outlook for Europe.

The dollar index stood near a 4 ½-month high of 92.964 hit on Monday. U.S. non-farm payrolls for March will be closely watched by the end of the week, with Fed policymakers citing slack in the labour market for continued dovish interest rates.

In cryptocurrencies, Bitcoin rose above $58,000 overnight after Visa Inc announced it would begin accepting cryptocurrencies as a mode of payment. The digital coin last stood around $57,000, continuing its recovery from a low of $50,360 last week. 

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