Bolstered by a decline in the Japanese yen, the U.S. dollar strengthened against G-10 currencies as traders prepared for a critical election in Japan this weekend. Long-term U.S. Treasury yields rose following the U.S. Treasury Department's quarterly refunding announcement. The Bloomberg Dollar Spot Index advanced by 0.3%. "In the near term, the dollar has room to recoup some of its recent losses, as the Federal Reserve is in no rush to resume policy easing, and there is a risk that the scale of rate cuts could fall short of current market expectations (50 basis points by year-end)," stated Elias Haddad, Global Head of Market Strategy at Brown Brothers Harriman. "However, any dollar rebound would present a selling opportunity." He added, "The Fed still has room to cut rates, whereas most other major central banks have either finished cutting or begun hiking. The dollar also faces significant structural headwinds, including diminished confidence in U.S. trade and security policy, the politicization of the Fed, and a deterioration in U.S. fiscal credibility." The yield on the 30-year U.S. Treasury note reached 4.92%, climbing to its daily high after the quarterly refunding statement was released. The benchmark 10-year U.S. Treasury yield increased to 4.27%. With the partial U.S. government shutdown ending on Tuesday evening, focus returned to U.S. economic data. USD/JPY rose 0.6% to 156.75, touching its highest level since January 23, marking its fourth consecutive day of gains ahead of the anticipated election victory for the Liberal Democratic Party, led by Prime Minister Sanae Takaichi, this weekend. Hedge funds are reinitiating short positions on the yen, positioning for further weakness. "Participants are shifting from rate-monitoring trades to Takaichi trades, closing USD/JPY short positions and cautiously going long," said Neil Jones, Managing Director of Sales and Trading at TJM Europe. EUR/USD declined 0.2% to 1.1799. GBP/USD fell 0.3% to 1.3652. AUD/USD dropped 0.6% to 0.6979. NZD/USD decreased 0.9% to 0.5993. New Zealand's unemployment rate unexpectedly rose to its highest level in a decade during the fourth quarter; although economic recovery spurred the first hiring growth in 18 months, the jobs data dampened expectations for interest rate hikes. USD/CAD gained 0.3% to 1.3677.