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· Dollar hits 1-year high versus yen as inflation worries lift yields

The dollar climbed to a one-year high against the yen on Tuesday amid a spike in Treasury yields, as accelerating vaccinations and massive stimulus in the U.S. stoked inflation concerns.

The safe-haven greenback also found support as investors worried about the potential fallout from the collapse of a hedge fund, identified as Archegos Capital, although those jitters had eased as the Asian trading day got under way.

The dollar rose to a cusp of 110 yen in Asia, a level not seen since March of last year. It’s on track for the best month since late 2016, with the end of Japan’s fiscal year this month driving up dollar demand as companies seek to square their books.

Benchmark 10-year Treasury yields rose as high as 1.7450% in Asia, approaching the 14-month high of 1.7540% touched earlier this month. The five-year note’s yield pushed as high as 0.9170% for the first time since March of last year.

Higher yields make a currency more attractive as an investment.

The euro languished near the 4-1/2-month low of $1.1763 reached on Monday, on course to fall by the most this month since mid-2019.

Tougher coronavirus curbs in France and Germany have dimmed the short-term outlook for the European economy, while a widening spread between U.S. and German bond yields are adding pressure on the single currency.

The dollar index, also known by the code DXY, hovered near a 4-1/2-month high of 92.964 reached on Monday.

“A break of 93.0 is just a matter of time,” Westpac strategists wrote in a report.

“There’s few signs the DXY’s rally has run its course, opening the door to a test of the 2020 Q3 highs of 94.50 for a stretch target.”

The monthly U.S. non-farm payrolls report will be closely watched at the end of this week, with Federal Reserve policymakers so far citing slack in the labour market for their continued lower-for-longer stance on interest rates.

· Bitcoin traded around $57,000, continuing recovery

In cryptocurrencies, bitcoin pushed back above $58,000 overnight after Visa Inc said it would allow the use of cryptocurrencies to settle transactions on its payment network, in the latest sign of growing acceptance of digital currencies on both Wall Street and Main Street.

The token last traded around $57,000, continuing its recovery from a trough of $50,360 last week. It set a record high at $61,781.83 earlier this month.

· U.S. 10-year Treasury yield can go above 2%: Pinebridge Investments

Omar Slim of Pinebridge Investments outlines the factors that he thinks will send the 10-year Treasury yield above 2%, and how this will development will impact emerging markets.

· UBS sees the Chinese yuan at 6.25 per dollar by the end of 2021*

Kelvin Tay of UBS Global Wealth Management says there is a “limit” to the U.S. dollar’s recent strength.

· President Joe Biden will outline on Wednesday how he would pay for a $3 trillion to $4 trillion plan to tackle America’s infrastructure needs.

· Leaders of 23 countries back pandemic treaty idea for future emergencies

Leaders of 23 countries and the World Health Organisation on Tuesday backed an idea to create an international treaty that would help the world deal with future health emergencies like the coronavirus pandemic now ravaging the globe.

The idea of such a treaty, which would ensure universal and equitable access to vaccines, medicines and diagnostics for pandemics, was floated by the chairman of European Union leaders Charles Michel at a G20 summit last November.

On Tuesday it got the formal backing of the leaders of Fiji, Portugal, Romania, Britain, Rwanda, Kenya, France, Germany, Greece, Korea, Chile, Costa Rica, Albania, South Africa, Trinidad and Tobago, the Netherlands, Tunisia, Senegal, Spain, Norway, Serbia, Indonesia, Ukraine and the WHO.

· Vaccine passports could prove to be a privacy minefield for regulators

The aviation and tourism industries — both brutalized over the last year — have been the keenest to pursue this technology to re-open global travel.

When the EU announced its plans for a “digital green certificate” this month, the tourism industry breathed a sigh of relief that maybe summer could be salvaged.

Since the onset of the coronavirus pandemic, the concept of a “vaccine passport” has been floated regularly. Once inoculated against Covid-19, a person could carry proof of vaccination that would allow them to travel or access services that are otherwise shut under lockdown.

· One dose of Pfizer or Moderna vaccines was 80% effective in preventing Covid in CDC study of health workers

· UK wants to vaccinate all adults before sharing vaccine with other countries

· Canada suspends use of AstraZeneca Covid vaccine for those under 55

Canada on Monday suspended the use of the Oxford/AstraZeneca coronavirus vaccine for people under 55 following concerns it might be linked to rare blood clots.

· Double mutation of the Covid variant in India risks spreading to other countries, doctor says

· Economists weigh in on the merits of net-zero climate goals: survey

A growing number of climate economists say the world should take “immediate and drastic action” to tackle climate change, according to a survey published Tuesday.

Failing to do so could cost the world some $1.7 trillion a year by the middle of this decade, escalating to about $30 trillion a year by 2075, according to estimations by the 738 economists from around the world surveyed by New York University’s Institute for Policy Integrity.

· Default risk in China is ‘certainly growing,’ says Fitch Ratings

The number of defaults have risen last year and could continue this year as Chinese authorities dial down economic stimulus, says James McCormack of Fitch Ratings.

· China's industry ministry holds meeting on auto display screen supply shortage

China’s industry ministry said on Tuesday it had urged automakers and display screen makers to strengthen coordination to ease tight supply of auto display screens.

· China's parliament approves Hong Kong electoral system reform plan: SCMP

The top decisionmaking body of the Chinese parliament unanimously approved a plan on Tuesday to reform Hong Kong’s electoral system, the South China Morning Post reported citing the city’s sole representative to the body.

The National People’s Congress Standing Committee approved the plan by a vote of 167-0, the paper said, citing comments from Tam Yiu-chung, who represents Hong Kong on the committee.

· China sharply reduces elected seats in Hong Kong legislature

· Hong Kong to reopen pools, beaches as COVID infections ease

Hong Kong will ease some coronavirus restrictions, the government said on Monday, allowing swimming pools and beaches to open and shortening the quarantine period for some international arrivals to 14 days from 21.

Secretary for Food and Health Sophia Chan told a press briefing that local infections had come down considerably, giving the administration room to relax some measures.

Beaches and swimming pools would reopen from April 1, while religious gatherings could resume with maximum capacity of 30%. Cinemas and theme parks would be able to increase capacity to 75% from 50%.

· BOJ's Kuroda says global, Japan economies rebounding from COVID shock

Bank of Japan Governor Haruhiko Kuroda said on Tuesday the global economy, including that of Japan, has hit bottom and was picking up from the shock triggered by the coronavirus pandemic thanks to “swift and aggressive” stimulus measures.

But he warned that risks to the economic and price outlook were skewed to the downside, stressing the BOJ’s readiness to ease monetary policy “without hesitation” as needed with an eye on developments over the pandemic.

· Japan's retail sales fall for third straight month

Japanese retail sales fell for the third straight month in February as households kept a lid on expenditure amid the coronavirus emergency, underscoring the fragile nature of the economy’s recovery from last year’s slump.

Retail sales lost 1.5% in February from a year earlier, government data showed on Tuesday, a smaller fall than the median market forecast for a 2.8% drop.

But it marked the third straight month of declines following January’s 2.4% fall and a 0.2% drop in December.

· Japan asks Taiwan manufacturers to cooperate in chip production

· Third US offer to break nuke deadlock rejected by Iran

In reaction to a US media report that Washington would offer a new proposal to jump-start talks, an unnamed official said Iran will not stop its 20% uranium enrichment before the lifting of sanctions.

· Iran rejects ending 20% enrichment before U.S. lifts sanctions - state TV

· Myanmar protesters launch 'garbage strike' as death toll tops 500

At least 510 civilians had been killed in nearly two months of opposition to the ouster of an elected government led by Nobel laureate Aung San Suu Kyi, and the return of military rule after a decade of tentative steps towards democracy, according to a tally by the AAPP advocacy group.

· Myanmar is on the brink of becoming a ‘failed state,’ says expert from think tank

Myanmar is on the verge of becoming a “failed state” and there needs to be greater international effort from the world’s major powers to resolve the escalating crisis, according to an expert from a think tank at the Lowy Institute.

· U.S. suspends trade deal with Myanmar until elected government returns

Reference: CNBC, Reuters, AP, jpost.com