Dollar Gains as Global Inflation Worries Intensify, Yen Plunges
The US dollar strengthened on Tuesday as renewed Gulf attacks sparked a global bond selloff and stoked inflation worries, while the yen slid past 160 per dollar again.
U.S. President Donald Trump threatened further strikes against Iran after the first exchange of direct attacks in a month, pushing Brent crude futures above $91 a barrel, fuelling inflation worries and spurring a bond selloff.
The yield on 10-year Treasury notes hit its highest since January 2025 while the 10-year Japanese government bond yield touched 3% for the first time in 30 years. U.S. Treasury Secretary Scott Bessent said he believed Japan's government and central bank would take action that leads to a stronger yen.
Markets appear unconvinced that verbal pressure alone will reverse the yen's weakness, leaving the currency vulnerable unless the BOJ delivers a clearly more hawkish signal or authorities intervene directly.