Yen slumps as rising energy prices, U.S. yields bite

 Yen slumps as rising energy prices, U.S. yields bite

Hand holding a magnifying glass and looking into the Yen Banknotes.

Zhang Peng | LightRocket | Getty Images

The yen hit a fresh three-year low on Tuesday, extending a sharp slide as traders wagered surging energy prices would drive Japan’s demand for dollars and as they doubled down on expectations U.S. rates will rise well ahead of its peers.

The yen, nursing losses after its worst session against the dollar in five months, edged another 0.1% lower to 113.48 per dollar in early Asia trade, its weakest since December 2018, having shed 1% on Monday.

The Japanese currency’s woes helped the dollar stay firm against a basket of major peers, even though the Aussie dollar has been gaining on surging energy prices and a bounce in iron ore.

The dollar index, which measures the greenback against a basket of peers, was at 94.4, not far from its one-year high of 94.504 touched at the end of September.

“What we’re seeing in currency markets is a…

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