Dollar rises vs yen, declines against sterling

The dollar touched a one-week high against the yen on Wednesday, boosted by a jump in Treasury yields and investor expectations for a rebound in Chinese growth as Covid-19 curbs loosen.

Meanwhile, the pound headed towards its largest one-day rise against the dollar in two weeks as UK markets reopened after a long weekend.

Gilts, which have not traded since Friday, came under pressure in line with a sell-off in global government bonds the previous day, which pushed yields up and further supported the pound.

The yen also eased after the Bank of Japan signalled that a surprise policy shift last week did not mark the start of a broader withdrawal of monetary stimulus.

The dollar rallied by as much as 0.67 per cent to 134.40 in Asian trading, the most since December 20, when the BOJ sent the pair spiralling lower with an unexpected loosening of the 10-year Japanese government bond yield policy band.

That day the yen staged its biggest one-day rally against the dollar in 24 years, closing 3.8 per cent higher, as traders speculated about an eventual unwinding of stimulus.