FOREX-Calmer bond market little salve for unloved yen

By Tom Westbrook and Kevin Buckland

SINGAPORE/TOKYO, March 24 (Reuters)The US dollar found some support in Asia on Thursday as commodity currencies took a breather from a steep rally driven by rising prices for exports, while a recovery in the US bond market offered little solace to the struggling yen.

The Australian and New Zealand dollars hovered just below multi-month peaks and the euro EUR=EBS held at $1.0989 after a modest overnight fall.

The yen JPY=EBS made a six-year low of 121.41 per dollar on Wednesday and was pinned near that level at 121.25 in morning trade as investors expect the Bank of Japan to lag way behind policy tightening by other major central banks fighting inflation.

An ever-more hawkish sounding US Federal Reserve has further widened that policy gap with the Bank of Japan, though even an overnight steadying in the Treasury market after a few sessions of brutal selling didn’t seem to give the yen much help.

“The fundamental drivers of dollar/yen now are US rates as well as Japan’s current-account because deterioration of high oil prices,” said Shinichiro Kadota, senior FX strategist at Barclays in Tokyo.

“From a technical perspective, about 121.7 was the high from early 2016, so that would be the next key target in the really near term, but if we break above that, 125 could come into focus.”

Benchmark 10-year Treasuries US10YT=RRwhich have been battered by another round of bets on aggressive US rate hikes, regained composure overnight and yields fell by 9 basis points (bps) – though they are still up more than 50 bps this month.

Elsewhere the Australian dollar AUD=D3 held at $0.7494 after a brief trip above $0.75 overnight. The New Zealand dollar USD=D3 was 0.2% softer at $0.6960.

Sterling GBP=D3 slipped overnight and was marginally softer on Thursday at $1.3187 even though February inflation was a little hotter than expected. GBP/

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Currency bid prices at 0230 GMT

Description

RIC

Last

US Close Previous Session

Pct Change

YTD Pct Change

High Bid

Low Bid

Euro/Dollar

EUR=EBS

$1.0987

$1.1001

-0.12%

-3.35%

+1.1014

+1.0983

Dollar/Yen

JPY=EBS

121.2250

121.1400

+0.05%

+5.37%

+121.2950

+121.0000

Euro/Yen

EURJPY=EBS

133.20

133.30

-0.08%

+2.21%

+133.4700

+132.9600

Dollar/Swiss

CHF=EBS

0.9318

0.9305

+0.15%

+2.15%

+0.9319

+0.9304

Sterling/Dollar

GBP=D3

1.3190

1.3205

-0.11%

-2.47%

+1.3213

+1.3185

Dollar/Canadian

CAD=D3

1.2565

1.2563

+0.02%

-0.62%

+1.2575

+1.2557

Aussie/Dollar

AUD=D3

0.7493

0.7500

-0.09%

+3.08%

+0.7502

+0.7483

NZDollar/Dollar

USD=D3

0.6961

0.6977

-0.19%

+1.74%

+0.6977

+0.6960

All spots FX=

Tokyo spots AFX=

European spots EFX=

Volatilities FXVOL=

Tokyo Forex market info from BOJ TKYFX

World FX rateshttps://tmsnrt.rs/2RBWI5E

(Reporting by Tom Westbrook in Singapore and Kevin Buckland in Tokyo)

((tom.westbrook@tr.com; +65 6973 8284;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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