Yen Inches Lower As US Treasury Yields Decline

Yen Inches Lower As US Treasury Yields Decline

23 Feb 2021 12:44 PM

Yen inched lower and traded below the 105.20 level as the US Treasury yields continued to decline. The pair is the worst performing major currency of 2021 due to its sensitivity to the US Treasury prices.

Japan released the January Corporate Service Price Index yesterday, which exceeded expectations at -0.5% YoY, although, worse than the previous -0.4%.

With Japan on a holiday for Emperor’s Birthday and with no data releases scheduled for the day, Fed chair Powell’s testimony later in the day will be the key driver.

Powell is expected to reassert that the Fed will continue focusing on the labour markets and not counter higher inflation with an immediate rate hike. Bond markets are expected to calm after the testimony which may cause the Dollar to extend losses.