By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia, finding some support as commodity currencies took a breather from their recent steep rally. Unfortunately, the U.S. bond-market recovery has dampened the Japanese yen.

That tracks the greenback relative to other currencies rose 0.18% by 12:08PM ET (4:08 GMT)

The pair inched up 0.07% to 121.23. showed that Japan’s for March 2022 was 53.2, and the was 48.7.

The pair edge down 0.19 % to 0.7483, with Australia’s was 57.3 and the was 57.9. This pair fell 0.2% to 0.6959

This pair increased 0.01% to 6.3729 while it fell 0.09% at 1.3191. Thursday’s data showed that the U.K.’s consumer price index grew 0.8% and 6.2% in February. While the input to the producer price index grew by 14.7% and 1.4%, respectively, producer price output increased 0.8% and 10.1%.

Following a minor overnight decline, Australian and New Zealand Dollars remained at their previous multi-month peak. However, euro trades at $1.098989.

On Wednesday, the yen fell to 121.41 dollars per dollar for its sixth consecutive year. It was close to that mark in the Asian session. Also released by the Bank of Japan earlier in day was a statement that indicated that policymakers believed that consumer inflation might exceed expectations. This could be because companies will pass on higher costs faster than anticipated.

A U.S. Federal Reserve that is ever more hawkish has only widened the gap to its Japanese counterpart. Mary Daly, San Francisco Fed President, stated that both a 50-basis-point interest rate hike and the decision to start asset tapering may be justified at the Fed’s next policy meeting in May 2022. Loretta Mester, Cleveland Fed President said she supports front-loading rates increases for 2022.

However, even an overnight stabilization in the U.S. Treasury Market after several sessions of severe selling didn’t provide any support for the yen.

“The fundamental drivers of dollar/yen now are U.S. rates as well as Japan’s current-account deterioration because of high oil prices,” Barclays PLC senior FX strategist Shinichiro Kadota told Reuters.

Technically, 121.7 is the highest high since early 2016. That would make it the next target. However, if we surpass that level, then 125 might be in focus.

Overnight, U.S. Treasuries with a 10-year benchmark suffered some losses after being hampered by increased bets of Fed rate hikes. While yields dropped by 9 basis point (bps), they remain higher than 50 bps for the month.