Rising U.S. yields push yen to lowest in nearly 3 years

Must Read

Haiti gang seeks $17 million for release of kidnapped missionaries – WSJ

World10 minutes ago (Oct 19, 2021 10:01AM ET) (C) Reuters. An entrance to the Christian Aid Ministries compound is seen...

Wales to get UK’s first hydrogen-powered brewery

A brewery in Wales is set to become the first in the UK to be powered by hydrogen, under...

UK says new taxes will be needed to replace fuel duty in net zero push

Commodities25 minutes ago (Oct 19, 2021 08:46AM ET) (C) Reuters. FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak delivers...
imageEconomy55 minutes ago (Oct 12, 2021 04:15AM ET)

(C) Reuters. FILE PHOTO: Banknotes of Euro, Hong Kong dollar, U.S. dollar, Japanese yen, GB pound and Chinese 100 yuan are seen in this picture illustration, in Beijing, China, January 21, 2016. REUTERS/Jason Lee/File Photo

By Saikat Chatterjee

LONDON (Reuters) – The Japanese yen held near its weakest levels versus the U.S. dollar in almost three years on Tuesday as a relentless rise in Treasury yields widened the yield advantage in favour of the greenback.

The dollar was at 113.19 yen at 0809 GMT having touched 113.50 in Asian trading, its weakest since December 2018.

The yen’s recent weakness — falling 4% in three weeks — comes at a time when global bond yields have surged due to inflationary concerns. Ten-year U.S. yields topped 1.60% for the first time since late May. [US/]

“The pick-up in market-based measures of inflation expectations and the hawkish shifts from central banks outside of Japan are contributing to the sell-offs in global fixed income markets and the yen,” MUFG strategists said in a note, noting the yen has the strongest correlation with U.S. yields.

A Deutsche Bank (DE:DBKGn) monthly market sentiment survey in October noted that an overwhelming majority of respondents expect U.S. Treasury yields to rise from current levels.

The yen also stayed in sight of a multi-month lows against other majors with sterling, the euro and the Aussie dollar all trading just off three month highs hit against the Japanese currency the previous day, when the Aussie enjoyed its best session against the yen in eleven months.

The dollar index, which measures the greenback against a basket of other major currencies was at 94.30, not far from a one-year high of 94.504 touched at the end of September, as traders positioned themselves for the U.S. Federal Reserve to announce a tapering of its massive bond buying programme in November.

“The primary driver of the move is the further rise that we’ve seen in U.S. Treasury yields – so it’s a fairly simple story of a widening rates differential…adding to the attraction of the carry trade,” said National Australia Bank (OTC:NABZY)’s head of foreign exchange strategy, Ray Attrill.

In cryptocurrencies, bitcoin edged off a five month high, falling 1.3% in Asian trading to $56,700. Ether, the world’s second biggest cryptocurrency dropped 1.54% to $3,489.

Rising U.S. yields push yen to lowest in nearly 3 years

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Subscribe here

Categories

Latest News

Haiti gang seeks $17 million for release of kidnapped missionaries – WSJ

World10 minutes ago (Oct 19, 2021 10:01AM ET) (C) Reuters. An entrance to the Christian Aid Ministries compound is seen...

More Articles Like This