The U.S. dollar is steadily strengthening against the euro, yen and pound sterling in trading on Monday. Against the yen, the dollar rose to the maximum since December 2015.

The dollar’s strength is supported by the continued rise in US Treasuries yields amid growing expectations of an acceleration in the pace of base interest rate hikes by the Federal Reserve (Fed). The market is currently pricing in a 2 percentage point rate increase by the end of this year, Bloomberg notes.

The yield of two-year US Treasuries on Monday added 13 basis points (b.p.), ten-year – 5 b.p.. The higher the rates, the more attractive the U.S. currency is for buyers.

The weakening of the yen is due to the growing divergence of the Bank of Japan’s policy with other central banks, which have already begun to tighten monetary policy, experts at Daiwa Capital Markets say.

The yield of ten-year government bonds in Japan rose to 0.25% on Monday, despite the fact that the Japanese Central Bank offered to buy from investors bonds in unlimited volume to contain the rise in yields.

The Bank of Japan targets the yield on ten-year government bonds around zero, allowing fluctuations of up to 0.25 p.p. in one direction or another.

As of 9:07 Moscow time {{1691| rate of the euro to the dollar decreased by 0.29% and is $1.0951 compared to $1.0983 at the close of the previous session.

The value of the U.S. currency paired with the yen jumped 0.94% to 123.20 yen against 122.05 yen at the end of previous trading.

The pound sterling fell 0.37% to $1.3133 compared to $1.3182 on Friday.

The ICE-calculated index, which shows the dollar’s performance against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), rose 0.43%, while the broader WSJ Dollar Index gained 0.37%.