Dollar Yen Absorbs Pressure from Rising Treasury Yields

Rising U.S. Treasury yields are causing dollar yen to absorb the pressure from an uncertain inflation outlook.

According to Alex Ridgers, StoneX Global Head of Retail Dealing, retail traders have moved their conviction out of equities and energy into the currency market, making dollar yen the most exposed pair to changes in U.S. Treasury yields.

Ridgers notes that a firmer crude oil price and an ongoing conflict are pushing U.S. inflation risk back to the forefront of the macro debate.

The Bank of Japan is also preparing to move again, with Ridgers stating that 'they are due to raise rates again, which for them to raise twice in short succession is almost unheard of.'