The pair is likely to trade with a firm undertone today in Asia as yields on Treasuries gained and US stocks surged amid growing confidence in the sustainability of an economic recovery in the US Yields on Treasury’s 10-year notes rose for a seventh straight day, up two basis points to 2.06% after touching 2.08%, the highest level since April 2012, while the Dow Jones hit a fresh life-time high. Expectations for widening interest rate differentials between the US and Japan would also support the dollar against the yen. Yields on 10-year JGBs fell below 0.6% last week amid heightened expectations for additional monetary easing. The Nikkei reported today that incoming Bank of Japan Governor Haruhiko Kuroda may consider holding an emergency policy board meeting before the scheduled one on April 3 and 4 to decide on an additional monetary easing. Kuroda, currently the president at the Asian Development Bank, is expected to sworn in on March 20 after the incumbent Governor Masaaki Shirakawa stepped down on March 19. On Monday, the rate moved from Y95.89 to Y96.36, just shy of Friday’s high of Y96.55, which was the highest level since April 2009.
EasyForexNews Research Team