On Tuesday, the dollar showed hesitancy, failing to receive a significant boost from an increase in U.S. Treasury yields. This lack of momentum maintained pressure on the yen, which hovered near multi-decade lows, prompting traders to remain vigilant for any signs of intervention.
The dollar managed a modest 0.03% gain against the yen, staying close to a 34-year high reached last month at 151.975 yen, as Japanese officials continued their verbal efforts to support the currency.
Finance Minister Shunichi Suzuki reiterated on Tuesday that authorities were prepared to take action against excessive yen movements, indicating a readiness to intervene if necessary.
Despite the rise in U.S. Treasury yields, which typically influences the dollar/yen pair, the threat of intervention from Tokyo prevented the dollar from surpassing the critical 152 yen level.
Analysts anticipate that the dollar/yen pair will maintain a narrow range between 151.0 and 152.5, with expectations of Japanese intervention to manage any sharp movements.
In other currency movements, the New Zealand dollar edged up by 0.15% to $0.6041, disregarding a decline in business confidence in the first quarter, as indicated by a private think tank survey.
Sterling slightly increased by 0.04% to $1.2658, while the euro stabilized at $1.0860, near a two-week high.
Despite the uptick in U.S. Treasury yields, the dollar struggled to gain significant traction, as traders adjusted their expectations regarding the timing and magnitude of Federal Reserve rate cuts projected for later this year.
Against a basket of currencies, the dollar remained close to a two-week low at 104.13, despite the two-year Treasury yield reaching a four-month high and the benchmark 10-year yield hovering near a similar peak.
Market futures currently indicate approximately 60 basis points of easing priced in for the Fed this year, with growing skepticism about an easing cycle beginning in June.
Ray Attrill, head of FX strategy at National Australia Bank (NAB), noted the disconnect between rising U.S. Treasury yields and the dollar's lack of response, attributing it to improving conditions outside the United States and a global reflation trade.
In other currency movements, the Australian dollar dipped by 0.01% to $0.6604, while the Chinese yuan remained stable at 7.2437 per dollar in the offshore market.
Although recent positive Chinese economic data helped stabilize the yuan this week, it still lingered near a 4-1/2 month low despite the central bank's efforts to set firmer daily benchmarks. The yuan has depreciated by 1.8% this year.
Paraphrasing text from "Yahoo Finance" all rights reserved by the original author.
