Yen plumbs 2023 lows as US treasury yields rally

Yen fell in European trade on Thursday against major rivals, extending losses for the sixth straight day against dollar and plumbing 2023 lows due to recent gains in US 10-year treasury yields. 

Yen was also pressured by improving risk appetite in the markets and weaker demand on safe havens, following positive developments in the US debt ceiling negotiations. 

USD/JPY rose 0.2% to 137.93, the highest since December, after falling 1% on Wednesday, the first loss in a row, and the longest such streak of losses since October 2022. 

US Yields

US 10-day treasury yields rose 0.9% on Thursday, extending gains for the fifth straight session and hitting two-week highs at 3.602%.

Such gains come following bullish remarks by Fed officials, which bolstered the case for a 0.25% rate hike by the Federal Reserve in June. 

Chicago Fed President Austan Goolsby said it's still too early to talk about interest rate cuts, while Cleveland Fed President Loretta Mister that interest rates aren't yet at a desirable place to combat inflation.

Such aggressive remarks raised the chances of a Fed rate hike in June from 12% to 31%.

US Debt Ceiling

US President Joe Biden and top Republican in the House of Representatives, Kevin McCarthy, asserted their commitment to reach a deal soon to raise the government debt level from $31.4 trillion.