The yen is under elevated pressure as US Treasury yields firm

(1) The U.S. dollar faltered on Tuesday, failing to get a significant boost from the rally in U.S. Treasury yields, but high U.S. Treasury yields kept the yen under pressure, hovering near multi-decade lows and keeping traders wary of any signs of intervention. (2) USD/JPY rose 0.08% to 151.88 on Tuesday, holding near a 34-year high of 151.975 set last month, as Japanese officials continued to ramp up intimidation efforts to defend the yen. (3) Japanese Finance Minister Jun Suzuki said on Tuesday that the Japanese government has not ruled out taking any measures to deal with the yen's excessive volatility and reiterated his warning that Tokyo is ready to act against the yen's recent sharp decline. (4) Tokyo's threat of intervention prevented the USD from breaking above the closely watched 152 yen level, even though USD/JPY usually moves in tandem with US Treasury yields. (5) SMBC economist Ryota Abe said: "USD/JPY will continue to move in a narrow range of 151.0-152.5. He expects that if the USD/JPY exchange rate rises rapidly, the Japanese authorities will intervene in the currency market to "curb volatility." (6) Bank of Japan Governor Kazuo Ueda said on Tuesday that the central bank must consider reducing monetary stimulus if trend inflation continues to accelerate. (7) U.S. Treasury yields held firm as traders scaled back expectations for the pace and magnitude of the Federal Reserve's rate cuts later this year, with the two-year Treasury yield hitting a more than four-month high of 4.8010% on Tuesday. The yield on the 10-year Treasury note edged down to 4.412%, but remained short of a more than four-month high of 4.464% set on Monday (8) Interest rate futures currently show that the market expects the Fed to cut interest rates by about 60 basis points this year, and the market is increasingly skeptical of starting an easing cycle in June. The US inflation data, which will be released on Wednesday, will be the main highlight of the week. (9) Ray Attrill, head of FX strategy at National Australia Bank (NAB), said, "Over the past few days, we have seen a growing disconnect between US Treasuries and the US dollar, especially as US Treasury yields have been hitting new highs so far this year, but the US dollar has not been able to react to this"