Update from 0.41 to 0.42.1 not workin - problem with yarl

I can’t update homeassistant to the latest version. It seem the installation process has problem with installing yarl 0.10.0. Anybody has any suggestion how to overcome this? Thanks.

Terminal info:
(homeassistant) homeassistant@remoto:/home/pi $ pip3 install --upgrade homeassistant
Collecting homeassistant
Using cached homeassistant-0.42.2-py2.py3-none-any.whl
Collecting aiohttp==2.0.5 (from homeassistant)
Using cached aiohttp-2.0.5.tar.gz
Requirement already up-to-date: jinja2>=2.9.5 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: typing<4,>=3 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: pytz>=2017.02 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: async-timeout==1.2.0 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: voluptuous==0.9.3 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: requests<3,>=2 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: pyyaml<4,>=3.11 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: pip>=7.1.0 in /srv/homeassistant/lib/python3.4/site-packages (from homeassistant)
Requirement already up-to-date: chardet in /srv/homeassistant/lib/python3.4/site-packages (from aiohttp==2.0.5->homeassistant)
Requirement already up-to-date: multidict>=2.1.4 in /srv/homeassistant/lib/python3.4/site-packages (from aiohttp==2.0.5->homeassistant)
Collecting yarl<0.11,>=0.10.0 (from aiohttp==2.0.5->homeassistant)
Using cached yarl-0.10.0.tar.gz
Requirement already up-to-date: MarkupSafe>=0.23 in /srv/homeassistant/lib/python3.4/site-packages (from jinja2>=2.9.5->homeassistant)
Collecting setuptools>=0.6b1 (from voluptuous==0.9.3->homeassistant)
Downloading setuptools-34.4.1-py2.py3-none-any.whl (390kB)
100% |████████████████████████████████| 399kB 564kB/s
Requirement already up-to-date: packaging>=16.8 in /srv/homeassistant/lib/python3.4/site-packages (from setuptools>=0.6b1->voluptuous==0.9.3->homeassistant)
Requirement already up-to-date: six>=1.6.0 in /srv/homeassistant/lib/python3.4/site-packages (from setuptools>=0.6b1->voluptuous==0.9.3->homeassistant)
Requirement already up-to-date: appdirs>=1.4.0 in /srv/homeassistant/lib/python3.4/site-packages (from setuptools>=0.6b1->voluptuous==0.9.3->homeassistant)
Requirement already up-to-date: pyparsing in /srv/homeassistant/lib/python3.4/site-packages (from packaging>=16.8->setuptools>=0.6b1->voluptuous==0.9.3->homeassistant)
Installing collected packages: yarl, aiohttp, homeassistant, setuptools
Running setup.py install for yarl … error
Exception:
Traceback (most recent call last):
File “/srv/homeassistant/lib/python3.4/site-packages/pip/compat/init.py”, line 73, in console_to_str
return s.decode(sys.stdout.encoding)
UnicodeDecodeError: ‘utf-8’ codec can’t decode byte 0x9e in position 1: invalid start byte

During handling of the above exception, another exception occurred:

Traceback (most recent call last):
  File "/srv/homeassistant/lib/python3.4/site-packages/pip/basecommand.py", line 215, in main
status = self.run(options, args)
  File "/srv/homeassistant/lib/python3.4/site-packages/pip/commands/install.py", line 342, in run
prefix=options.prefix_path,
  File "/srv/homeassistant/lib/python3.4/site-packages/pip/req/req_set.py", line 784, in install
**kwargs
  File "/srv/homeassistant/lib/python3.4/site-packages/pip/req/req_install.py", line 878, in install
spinner=spinner,
  File "/srv/homeassistant/lib/python3.4/site-packages/pip/utils/__init__.py", line 676, in call_subprocess
line = console_to_str(proc.stdout.readline())
  File "/srv/homeassistant/lib/python3.4/site-packages/pip/compat/__init__.py", line 75, in console_to_str
return s.decode('utf_8')
UnicodeDecodeError: 'utf-8' codec can't decode byte 0x9e in position 1: invalid start byte