© Reuters.
By Gina Lee
Investing.com -- The dollar was up on Tuesday morning in Asia, while the Japanese yen hit a 20-year low against the U.S. currency as Treasury yields remain high.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.21% to 100.975 by 12:57 PM ET (4:57 AM GMT).
The USD/JPY pair rose 0.92% to 128.13. The dollar has risen 4.5% against the Japanese currency so far this month, the second-biggest monthly percentage gain since 2016 behind the previous month’s 5.8%.
"I think the broad dollar trend reflects U.S. economic outperformance, while we've seen some initial impacts of higher energy prices from the Ukraine war elsewhere, especially in the eurozone," Commonwealth Bank Of Australia FX strategist Carol Kong told Reuters.
Kong added that she was watching European purchasing manager index (PMI) data due in several markets on Friday. The U.K. and U.S. will also release their PMIs within the week.
"If we get weak purchasing manager index numbers in the eurozone or elsewhere, then markets could potentially downgrade their economic expectations but I don't think the PMI will be particularly weak so we'll see some contrast there, which would probably support the dollar," she added.
"Of course, the big driver for dollar-yen has been surging U.S. bond yields."
The benchmark U.S. 10-year Treasury yield on Tuesday was just below its three-year high of 2.884% hit on Monday. Meanwhile, the Bank of Japan has intervened to keep the yield on Japanese 10-year government bonds around 0% and no higher than 0.25%.
Japan is monitoring how the weakening yen could impact the economy, as stability in the currency market was important, the country’s Finance Minister Shunichi Suzuki said on Tuesday.
Across the Atlantic, the euro was at $1.0776, testing the two-year low of $1.0756 hit during the previous week. The pound was also impacted by the war in Ukraine, precipitated by the Russian invasion on Feb. 24. Russia has launched a fresh offensive in the eastern Ukrainian region of Donbas, according to Ukraine.
Elsewhere, the Australian dollar edged up from Monday's one-month low as the Reserve Bank of Australia released the minutes from its latest meeting.
In cryptocurrencies, Bitcoin was trading around the $40,800 mark on Tuesday after hitting a one-month low of $38,547 on Monday.
