The dollar rises, the yen falls amid movements in bond markets.

The currency markets witnessed clear movements on Tuesday, May 27, as the US dollar rose supported by positive consumer confidence data, while the Japanese yen declined due to pressures in the local bond market.

The US dollar rose by about 1% against the Japanese yen to reach 144.28 yen, and increased by 0.77% against the Swiss franc, reaching 0.827 francs.

This rise came after data from the Conference Board revealed an improvement in US consumer confidence in May, surpassing expectations.

On the other hand, investors are awaiting personal consumption expenditure data scheduled for release on Friday, which is a key indicator of inflation in the United States and may therefore affect the Federal Reserve's policy direction.

The Japanese yen faced pressure due to a significant drop in long-term bond yields, with sources telling Reuters that Tokyo is considering reducing the issuance of these bonds following a recent sharp increase in yields.

Eric Theoret, currency strategist at Scotiabank in Toronto, explained: "This is significantly influenced by global bond markets, especially recent developments in Japan."

Theoret added: "Traders are evaluating the Japanese Ministry of Finance's move to send a survey to major dealers regarding issuances."

The reasons for the rise in Japanese bond yields include decreased demand from traditional buyers such as life insurance companies, in addition to global concerns about rising debt levels.

The euro fell by 0.46% against the dollar to 1.1335 dollars, influenced by data showing a decrease in inflation in France to its lowest level since December 2020.

In a related context, US President Donald Trump announced a postponement of a 50% tariff on the European Union to July 9 instead of early next month, boosting market sentiment.

According to Reuters, two informed sources revealed that policymakers in the European Union have requested some companies and CEOs to provide details about their investments in America in preparation for upcoming negotiations with the United States.