Yellen said on Friday the central bank is on track to raise interest rates this year if the economy improves.
The labor market is “approaching full strength,” and unemployment rate should drop to near 5 percent by the end of 2015, Yellen said.
Data released on Friday signaled U.S. consumer prices rose the most in two years, as core CPI, excluding food and fuel, surged 0.3 percent in April from both prior and forecasted readings of 0.2 percent.
The green currency took advantage of the rise in U.S. 10-year Treasury yields that climbed to a peak of 2.23 percent on Friday.
The rise and fall in Treasury yields have been one of the key factor supporting or putting downside pressure on the dollar.
However, The U.S. bond market is closed on Monday for the Memorial Day holiday, after closing at 2 p.m. ET on Friday.
As for the yen, it retreated further today after a report showing Japan’ trade surplus turned into deficit in April.
The USDJPY hit a peak of 121.76, yet it retreated to trade around 121.52.
For today, the pair may fluctuate between key support at 120.88 and key resistance at 121.80.
The pair was boosted on Friday by the bullish crossover between SMA 20 and SMA 50, as depicted in the daily charts.
The USDJPY may still rise as the RSI 14 momentum indicator is still below the overbought areas.