What colour band has he been on previously?? 'Yellow' is only the third level up, and is for 4 to 5 years old. BUT probably not all the words are 'decodable' by basic Phonics methods, so he will need help with some words.
As long as you support his reading in a sympathetic and relaxed way, and don't demand he gets every word right, he should cope OK. I'll give you a couple of things that may help you both:
ONE - An inexpensive and easy to use book, that can encourage children with reading, spelling and writing, and really help them to understand Phonics, is reviewed in the MN Book Reviews section. Just search ‘Phonics’ and my name.
TWO - When reading harder books with a child, get him to point to words as he goes along. If he knows the word, or can sound it out, he can say it. If he doesn't know the word, he can hover his finger over it, and YOU say the word for him. Don't stop to analyse or discuss the word at this stage, but try and keep the 'flow' of reading going. Review difficulties at the end, if you wish to. This way, he has the satisfaction of reading more difficult books, without the fear of getting 'stuck' on words.
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Even in really difficult books there will be some words he either knows, or can sound out, so don't be afraid to tackle more advanced books. Just don't put him under pressure, and let him read the words he can, and you do the rest.