WASHINGTON/LONDON: The dollar touched a one-week high against the yen on Wednesday, boosted by a jump in Treasury yields and investor expectations for a rebound in Chinese growth as COVID-19 curbs loosen.
Meanwhile, the pound headed towards its largest one-day rise against the dollar in two weeks as Britain’s markets reopened after a long weekend.
Gilts, which have not traded since Friday, came under pressure in line with a sell-off in global government bonds the previous day, which pushed yields up and further supported the pound.
The dollar rallied by as much as 0.67% against the yen to 134.40 in Asian trading, the most since Dec. 20, when the Bank of Japan sent the pair spiralling lower with an unexpected loosening of the 10-year Japanese government bond yield policy band.
That day, the yen staged its biggest one-day rally against the dollar in 24 years, closing 3.8% higher, as traders speculated about an eventual unwinding of stimulus.
But a summary of opinions from the meeting, released on Wednesday, showed policymakers backing a continuation of ultra-accommodative policy, even as they discussed improving prospects for higher wage growth and sustained inflation next year.
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