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USD/JPY Fundamental Daily Forecast – Dollar/Yen Firms as Investors Bet on Early Fed Tapering

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The Dollar/Yen closed higher on Friday, supported by a rise in U.S. Treasury yields as investors increased their bets on a sooner-than-expected Federal Reserve tapering, following the release of a solid producer price inflation report.

The spread between U.S. Government bond yields and Japanese Government bond yields widened, making the U.S. Dollar a more attractive asset. The spread widened after a government report on producer prices came in stronger-than-expected.

Gains were likely limited by a plunge in the U.S. stock market. This may have sent investors into the safety of the Japanese Yen.

On Friday, the USD/JPY settled at 109.912, up 0.179 or +0.16%.

10-Year Treasury Yield Advances as Producer Prices Rise More than Expected

U.S. Treasury yields rose Friday morning as the producer price index showed that parts of the U.S. economy are still contending with inflation.

The yields on the benchmark 10-year Treasury note added 3.9 basis points, climbing…

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