24 Mar 2014
USD supported by short term yields and improving risk sentiment - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ comments that the US dollar has continued to strengthen against the yen in the Asian trading session supported by both rising short-term US yields and improving investor risk sentiment.
Key Quotes
"The yield on the 2-year US Treasury bond has risen by just over 10 basis points to 0.45% since the Fed presented a less dovish monetary policy outlook last week."
"It is the highest level since September of last year when investors’ first anticipated that the Fed may begin to taper QE. We continue to believe that there is still scope for US yields to rise further in the near-term supported by building evidence that the US economy is rebounding after the weather-related slowdown in early 2014."
"Despite the weakening of the yen, the Japanese equity market continues to underperform although the Nikkei 225 index has increased by around 1.8% overnight. BoJ Deputy Governor Kikuo Iwata has been speaking overnight but gave no signal that the BoJ is currently considering implementing additional monetary easing in the near-term. Rather Deputy Governor Iwata stated that BoJ easing announced last April already factored in a GDP slowdown in Q2 2014 resulting from the consumption tax hike."
Key Quotes
"The yield on the 2-year US Treasury bond has risen by just over 10 basis points to 0.45% since the Fed presented a less dovish monetary policy outlook last week."
"It is the highest level since September of last year when investors’ first anticipated that the Fed may begin to taper QE. We continue to believe that there is still scope for US yields to rise further in the near-term supported by building evidence that the US economy is rebounding after the weather-related slowdown in early 2014."
"Despite the weakening of the yen, the Japanese equity market continues to underperform although the Nikkei 225 index has increased by around 1.8% overnight. BoJ Deputy Governor Kikuo Iwata has been speaking overnight but gave no signal that the BoJ is currently considering implementing additional monetary easing in the near-term. Rather Deputy Governor Iwata stated that BoJ easing announced last April already factored in a GDP slowdown in Q2 2014 resulting from the consumption tax hike."