Hawkish Powell pushes yen past 120 barrier

SINGAPORE : The yen fell through the psychological 120 level for the first time since 2016 on Tuesday, after a hawkish speech from Federal Reserve Chair Jerome Powell raised bets on higher U.S. interest rates and widened the policy gap on a dovish Bank of Japan.

"Widening policy divergence is continuing to push the yen to more deeply undervalued levels against the U.S. dollar," MUFG currency analyst Lee Hardman said.U.S. bonds and interest-rate futures took a further flogging overnight after Powell said policymakers needed to move"expeditiously" and put the possibility of 50-basis point rate hikes on the table.

Benchmark 10-year yields rose 14 bps and, at 2.0914per cent, the gap on anchored 10-year Japanese yields is the widest in more than 2-1/2 years. [US/][JP/]

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