LONDONSINGAPORE, May 29 Reuters The Japanese yen drifted to its softest level in four weeks against the dollar on Wednesday on the back of rising U.S. yields, as placid markets encouraged investors to resume carry trades, while the euro weakened after German inflation data.

The dollar reached as high as 157.41 yen early on Wednesday, inching back to levels that led to bouts of likely intervention from Tokyo at the end of April and early May, albeit rising at much slower pace than it did last month.

It was last at 157.10 yen, steady on the day.

Generally across Asian currencies, that relief rally postCPI is starting to fade, as U.S. easing expectations are trimmed and some rocky bond auctions cause yields to climb back up, placing the yen and Chinese yuan under pressure, said Simon Harvey, head of FX analysis at Monex Europe.

Slightly softer U.S. consumer price inflation data this month weakened the dollar across the board. Since then, however, U.S Treasury yields have resumed their climb, with benchmark 10year yields their highest in almost four weeks at 4.57.

A lacklustre auction of twoyear and fiveyear notes that raised doubts about demand for U.S. government debt, and data on Tuesday showing that U.S. consumer confidence unexpectedly improved in May, were the drivers.

The dollar was up 0.09 on the yuan traded offshore at 7.270.

That continued weakness in the yuan is having knockon effects on G10 currencies. Today39;s Australian inflation data should have been…