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

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* Graphic: World FX Rates tmsnrt.rs/2RBWI5E

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LONDON, Oct 12 (Businesshala) – The Japanese yen held near its weakest level in nearly three years versus the US dollar on Tuesday, as a sustained rise in Treasury yields widened yield gains in favor of the greenback.

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

The yen’s recent weakness – falling 4% in three weeks – comes at a time when inflation concerns have raised global bond yields. Ten-year US yields topped 1.60% for the first time since late May.

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Strategists at MUFG noted in a note to the yen, “The pick-up in market-based measures of inflation expectations and sharp changes from central banks outside Japan are contributing to a sell-off in global fixed income markets and the yen. ” The strongest correlation is with US yields.

Deutsche Bank’s monthly market sentiment survey in October said an overwhelming majority of respondents expected US Treasury yields to rise from current levels.

The yen also edged closer to a multi-month low against other majors, with the sterling, the euro and the Australian dollar trading at a three-month high against the Japanese currency the previous day, when the Aussie opened against the yen. Enjoyed his best season against in eleven months.

The dollar index, which measures the greenback against a basket of other major currencies, was at 94.30, having touched a one-year high of 94.504 at the end of September, as traders declared themselves a tapering for the US Federal Reserve. was posted to. Its massive bond purchase program in November.

“The primary driver of this move is the further growth we’ve seen in the US Treasury yield – so it’s a fairly simple story of a wide rate differential … adding to the allure of the carry trade,” said the head of National Australia Bank. Forex Strategy, Ray Attrill.

In crypto, bitcoin hit a five-month high, falling 1.3% to $56,700 in Asian trade. Ether, the world’s second largest cryptocurrency, fell 1.54% to $3,489.

Reporting by Saikat Chatterjee; Additional reporting by Alun John in Hong Kong; Editing by Kirsten Donovan

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