By Gina Lee

Investing.com – The dollar was up on Tuesday morning in Asia, while the Japanese yen hit a 20-year low against the U.S. currency as Treasury yields remain high.

By 12:57 ET (5:00 GMT), the index that measures the greenback’s performance against other currencies had increased by 0.21%, to 100.975 (4:57 GMT).

It rose to 128.13, 0.92%, with Japanese data released earlier that day showing that it grew by 2% month on month in February 2022.

Both the pair rose 0.4% to 0.7376, and both were up 0.09 to 0.6740.

While the pair increased by 0.08%, it dropped to 6.3723. The pair fell by 0.06% at 1.3000.

In early Asian trading, it rose 0.3% on the yen and reached 127.44yen. This is the highest level of the year since May 2002. It has risen 4.5% on the Japanese currency in April 2022 to date, the second-biggest monthly percentage gain since 2016 behind the previous month’s 5.8%. Also, the greenback held firm against all other currencies. Monday’s 100.86 mark was only a two-year record.

“I think the broad dollar trend reflects U.S. economic outperformance, while we’ve seen some initial impacts of higher energy prices from the Ukraine war elsewhere, especially in the eurozone,” Commonwealth Bank Of Australia FX strategist Carol Kong told Reuters.

Kong also stated that she is watching European PMI (preliminary manufacturing index) data. These are due on several markets this Friday. The will also publish their PMIs in the coming week.

“If there are weak purchasing manager index numbers anywhere in the eurozone, the markets might downgrade their economic forecasts. But I don’t believe the PMI would be especially weak, so we will see some contrast which would likely support the dollar,” she said.

Surging U.S. bonds yields have been the biggest driver for dollar-yen.

On Tuesday, the benchmark was at 2.884%, which is just below Monday’s three-year peak of 2.884%. Bank of Japan has taken measures to ensure that the yield of Japanese 10-year bonds is kept at around 0%. It will not exceed 0.25%.

Japan is monitoring how the weakening yen could impact the economy, as stability in the currency market was important, the country’s Finance Minister Shunichi Suzuki said on Tuesday.

The euro traded at $1.0776 across the Atlantic. This was above the $1.0756 low reached during the week. Due to the Russian invasion that took place on February 24, the war in Ukraine also had an effect on the British pound. According to Ukraine reports, Russia launched another offensive in Donbass, an eastern Ukrainian region.

Elsewhere the Australian dollar rose from Monday’s 1-month low, after the Reserve Bank of Australia released its minutes.

After hitting an all-time low of $38,547 Monday, bitcoin traded around $40,800 on Tuesday.