Dollar hits six-day high after rising US bond yields; yen stabilizes

Dollar billets REUTERS/Ricardo Moraes

LONDON, Jan 18 (Reuters) – The dollar hit a six-day high on Tuesday, following a rise in U.S. Treasury yields, while the yen steadied after the Bank of Japan said it will maintain its policy ultra-loose monetary policy, which led to a depreciation against the greenback.

* The Federal Reserve will meet next week. It is expected to raise interest rates in March for the first time since the start of the coronavirus pandemic, with investors forecasting four hikes in total during 2022.

* As investors brace for the possibility of the Fed being tougher than expected, bond yields soar. That of two-year paper – which follows expectations of short-term rates – exceeded 1% for the first time since February 2020.

* The return on US 10-year debt also hit a two-year high.

* The dollar strengthened against a basket of six major currencies, trading at a six-day high of 95.454 during Asian trading. At 1232 GMT it was trading at 95.385 units, up 0.2% on the day.

* The euro-dollar parity was down 0.1% at $1.1388.

* The yen eased after the Bank of Japan said it will maintain its ultra-loose monetary policy, as global peers move toward exiting crisis-time policies.

* At 1237 GMT, the US currency was stable at 114.6 yen, after hitting a high of 115.06 overnight.

CHART (in English): Dollar-Yen Parity https://tmsnrt.rs/3rukvYw

Exchange rates in the world http://tmsnrt.rs/2hzquG7

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(Reporting by Elizabeth Howcroft; edited in Spanish by Carlos Serrano)

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