Dollar/Yen Rises on Reversal in U.S. Treasury Yields: Daily Market Update

The Dollar/Yen is on the move early Tuesday, with the pair inching higher thanks to a late session reversal in U.S. Treasury yields. On Monday, the dollar saw a slight dip as traders reacted to mid-term U.S. Treasury yields dropping following setbacks in Washington and concerns about the Omicron variant.

At 03:00 GMT, the USD/JPY is trading at 113.654, up 0.027 or 0.02%. The Invesco CurrencyShares Japanese Yen Trust ETF settled at $82.57, up $0.03 or 0.04%.

U.S. Treasury yields saw a slight increase on Monday as investors assessed the risk posed by the Omicron variant on the economic recovery. The yield curve also steepened following the breakdown of spending talks in Washington.

Dollar/Yen traders have been experiencing volatility since the Federal Reserve’s recent monetary policy decisions. The yield curve movements have been closely watched, with analysts trying to predict the impact on the Fed’s future actions.

Hope for President Biden’s domestic investment bill took a hit as Senator Joe Manchin announced he would not support the $1.75 trillion package. This news has implications for U.S. economic growth and the pace of Federal Reserve rate hikes.

Goldman Sachs’ revised GDP forecast for 2022 in response to the Manchin news has raised concerns about slower economic growth and its impact on interest rates. This could potentially cap the USD/JPY pair’s gains.

For more insights and updates on today’s economic events, refer to the economic calendar. This article was originally published on FX Empire.

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