The dollar surged to its highest level in over a week against the Japanese yen, supported by an increase in Treasury yields amid hopes for a recovery in demand in China with the easing of COVID-19 restrictions. The yen also faced pressure amid further indications from the Bank of Japan that last week's sudden change in monetary policy was not the beginning of a reduction in stimulus.
The dollar rose by 0.5% to 134.17 yen in Asian trading, previously hitting 134.40 yen earlier in the session, marking the first time since December 20. The Japanese yen fell against other currencies as well, with the euro increasing by 0.51% to 142.70 yen, the highest level in a week. The Australian dollar jumped by 0.62% to 90.40 yen, also reaching the highest level in a week.
The dollar index, which measures the performance of the U.S. currency against a basket of six major currencies, including the yen and euro, increased by 0.1% to 104.31, continuing its rise after dropping to its lowest level since mid-June at 103.44 on December 14.
The euro stabilized at $1.0636, moving back and forth over the past two weeks, remaining below its six-month high of $1.0737 reached on December 15. The British pound fell by 0.15% to $1.2013, hovering above its lowest levels this month at $1.1993 recorded on December 22. The Australian dollar climbed by 0.07% to $0.6738, heading towards the upper end of its trading range that it reached on December 16.
