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The U.S. dollar remained near a two-month high on Friday, supported by rising Treasury yields and expectations of additional Federal Reserve rate hikes, while the Japanese yen hovered near the closely watched 160-per-dollar level.
The U.S. Dollar Index traded around 101.28 in early Asian hours after advancing for four consecutive sessions. The index is up roughly 1.1% this week as resilient U.S. economic data and persistent inflation concerns reinforce expectations that interest rates could remain elevated.
U.S. Treasury yields extended their climb, with the 30-year yield reaching its highest level since June 2004 and the benchmark 10-year yield hitting its strongest level in nearly two decades. Initial jobless claims also fell by 1,000 to 197,000, below forecasts of 201,000, signaling continued strength in the labor market.
The Federal Reserve raised its benchmark rate by 25 basis points last week to 3.75%-4.00%. Several policymakers have since indicated that further tightening may be necessary if inflation remains stubborn.
Oil prices are adding to inflation concerns after crude surged nearly 4% following a Houthi missile attack on Saudi Arabia. Gains later moderated amid reports of U.S.-Iran discussions over reopening the Strait of Hormuz.
USD/JPY traded near 158.46 after touching 159.04 on Thursday, the yen's weakest level since September 2. The currency has declined for two consecutive weeks following the Bank of Japan's September 18 policy decision. The approach toward 160 has renewed market speculation about possible intervention by Japanese authorities.
Elsewhere in Asia, the Australian dollar was the week's weakest major regional currency against the greenback, falling 1.6%. Australia's unemployment rate rose to 4.6% in August, its highest since 2021, while AUD/USD traded around $0.70.
The Chinese yuan also weakened, with USD/CNY reaching 6.71 after three sessions below 6.70. NZD/USD hovered near $0.57, while USD/KRW fell 0.3% to 1,361.75 and USD/IDR gained 0.3% to 17,930.1.
